“Private Company Outlook: Governance,” a recent Deloitte Private survey of 100 C-level private business leaders, provides a sampling of current views on corporate governance, AI business risk and more. The findings reveal that organizations are increasing their use of AI and making larger investments in technology in general.
When asked about the main priorities for their business over the next year, 43% of respondents cited more widespread use of AI across the company, while 37% forecasted an increase in technological spend. Thirty-one percent said they would be working to improve cost structure and margins, and 27% plan to identify more ways to increase productivity.
Half (50%) of the respondents said determining use of AI in their organizations was a “high or very high priority,” while 49% gave the same ranking to “reskilling /upskilling or training the workforce” and training/educating board members.”
According to Wolfe Tone, Deloitte Private’s U.S. vice chair, “Private companies are preparing their organizations for a growing number of risks while pursuing opportunities for growth and innovation, and that preparation includes enhancing their respective board’s understanding of emerging technologies. Specifically, private company leaders told us their organizations are prioritizing digital transformation and AI as the most important competencies to strengthen their organization’s board. They’re emphasizing training and education for their respective board members about expanding application of AI throughout all phases of a business, just as they’re upskilling their current workforce for the use of AI within the organization.”
The survey also sought to gauge C-suite leaders’ views on the most important competencies needed to strengthen the board. “Emerging technology/AI” was selected by 43% of respondents. Thirty-six percent of those surveyed believe marketing skills are in high demand, and 30% chose strategic capabilities as a skill that would be beneficial to directors and the board. Just 12% identified “cybersecurity” as a skill that is currently of utmost importance to solidify the board.
According to private company leaders, climate is an issue that presents a “high or very high” macro risk to the organization, yet they believe their boards are spending enough time on the subject. Sixty-six percent of respondents identified climate as a high to very high macro risk over the next 12 months, with 50% saying their board spends an “adequate amount of time” discussing the subject. Market competition was chosen as a high or very high macro risk by 52% of respondents, with the pace of digital transformation being the only risk area to be cited by a majority of those surveyed (50%). Other topics that private company business leaders believe their boards should be spending more time on include inflation (64%), regulatory changes (61%) and geopolitical risks (59%).
In the area of talent, 51% of respondents say that it is a topic that has appeared on the agenda for their quarterly board meetings in the last 12 months and 61% believe that their boards should be spending more time discussing talent issues.
According to Tone, “It isn’t just another item on the agenda. We found that private company leaders are advocating for heightened board focus on talent strategies, making it clear that attracting, developing and retaining top talent continues to be a business imperative.”