As part of the National Association of Corporate Directors’ (NACD) continuing mission to help directors understand disruptive technologies and trends, I joined more than 175,000 attendees at the 2017 Consumer Electronics Show (CES) in Las Vegas. My team was doing a little reconnaissance work on your behalf. NACD will host a director-focused, member-exclusive Technology Symposium this July, and we wanted to get an advanced look at the most pressing governance implications of new technology.
After three days of experiencing more than 3,800 vendors, you start to see past the shine of the latest gadgets and understand how the technology that underpins these products is poised to change the world. How those technologies are leveraged by companies is key to understanding the future of disruption, and as we discussed at last year’s Global Board Leaders’ Summit, convergence is the order of the day.
Voice and Motion-Enabled Artificial Intelligence (AI) Are Here to Stay
A booth showcased one of many partnerships between Amazon and consumer products companies, including Whirlpool.
From controlling the radio volume with a wave of your hand to voice-controlled appliances, AI was everywhere. In fact, the most talked-about company at CES this year didn’t even have a booth. The Amazon logo appeared on products ranging from innovations by Whirlpool to debuting devices from smaller start-ups.
Why? Alexa, Amazon’s AI assistant, was ubiquitous on the show floor.
Alexa is leading the way in enhancing consumer products that implement voice-enabled technology. It is anticipated that Alexa will soon be programmed to power and interact with everything from your toaster to your Toyota.
It became apparent at CES that the future of voice-enabled AI is a person’s ability to speak naturally and rely on the computer to accurately transcribe information. This has significant impact for everyone from office workers to doctors who could rely on the technology to dictate notes to medical records.
John Hotta, a director in the healthcare space and NACD Board Leadership Fellow, was also on hand at CES. “Innovations in voice-activated technology also have huge implications for products, services, and the nature of work, as smart speakerphones or personal assistants such as Google Home or Amazon Dot replace direct user interface with a computer,” Hotta said.
Computer, You Can Drive My Car
CES exhibitors demonstrated the growing sophistication of autonomous vehicle technology. Last year Ford Motor Company CEO Mark Fields promised to turn the automaker from a car company to a mobility company. That strategy was on full display as Ford partnered with San Francisco-based start-up Chariot to show off one of its autonomous mini-buses, a vehicle that Ford hopes will “reinvent mass transit for commuters, companies, and fun-seekers with reliable and affordable service.”
A wealth of connected, autonomous vehicles were on display.
Autonomous vehicles also buzzed high above the heads of CES attendees. As drone technology continues to evolve for both commercial and industrial use, autonomous vehicle technology is being applied to those vehicles as well. In a convergence of these trends, Mercedes exhibited a fully autonomous delivery vehicle equipped with two roof-mounted drones that facilitate package delivery from the van to the doorstep.
Another trend emerged at CES: the use of autonomous vehicles as a tool for vehicle safety. Thanks to the convergence of AI and the Internet of Things (IoT), vehicle-to-vehicle technology has enabled cars to talk to their passengers and to other vehicles on the road. As attendees at the 2016 NACD Global Board Leaders’ Summit may remember, Chris Gerdes, head of innovation at the Department of the Transportation (DOT), discussed how DOT is piloting this technology in cities across the U.S. to slash traffic fatalities, and nearly every major automaker is now getting in on the act. Hyundai and Cisco announced a partnership to leverage IoT technology to improve safety and improve congestion by connecting vehicles to municipal infrastructure.
Collaboration is Key
Consumer products and technology companies are forging essential partnerships.
As technology becomes more ubiquitous and innovation becomes decentralized, companies are realizing they can’t go it alone. Consumer products companies are linking up with leading technology companies to build resilience to innovation. In addition to the proliferation of Alexa-linked products, Honda Motor Co. has teamed up with VISA to enable vehicle-based mobile payment systems that allow passengers to conduct transactions without leaving their cars. Apparel companies like Tory Burch and Fossil—companies that seem more at home at New York Fashion Week than at CES—also had large booths touting their new lines of wearables. And finally, in-house labs at big brands like Whirlpool are partnering with crowd-funding platforms like IndieGogo to launch new products. Like the auto companies profiled above, this is another example of convergence that directors would be wise to anticipate.
Private Eyes Are Watching You
The act of welcoming devices into our workplaces and homes that listen and watch our every move could revolutionize the way we live and work—and opens us to unprecedented privacy and security concerns. Coupled with a proliferation of smart products aimed specifically at tweens and children, smart devices present a whole host of liability issues that technology, legal, and regulatory experts are just starting to grapple with.
Amazon’s Alexa and Mattel have already made news for the unintended consequences of giving children access to this kind of technology. Additionally, U.S. courts are considering the legal implications of using recordings from these devices as evidence. One such case pits Amazon against prosecutors in who believe that data from an Amazon Echo might be key in solving a murder case.
In this rapidly evolving climate, directors should be asking questions about whether or not security is being integrated into product development now and in the future—from research and development, to plant upgrades, to policies that allow employees to use their own smart devices for work.
The Future of the Workforce
Ian Bremmer, president of Eurasia Group and a 2016 NACD Global Board Leaders’ Summit speaker, recently said, “Technology will surely create jobs. But virtually none of the people displaced will have the training for them.” The changing nature of the global economy threatens to make some American jobs obsolete. If CES made one point clear, it’s that the current concern over the decline in manufacturing and coal jobs pales in comparison to the potential changes that will come with widespread automation of jobs.
Volkswagen exhibits its electric, autonomous I.D. concept car.
Remember the self-driving delivery van with the automated drones that deliver packages mentioned above? Think about that technology and then look at this interactive map of the top jobs by state. Last August, Uber Technologies acquired Otto, a self-driving truck company, further showing how 1.7 million middle-class jobs could disappear in short order. The American economy is facing a potential employment crisis the likes of which may be unprecedented.
It’s not just delivery drivers who are in danger. As Jane Fraser, CEO of Citigroup’s Latin America business said at Fortune magazine’s Most Powerful Women Summit in October, “we are expecting 500 billion objects to become connected to the internet and this automation is going to hollow out middle and working class jobs.”
This shift has huge implications for the American economy and its ability to compete on a global scale. Consider, for instance, that automated delivery of packages is only helpful if your company has a customer base that can afford to spend money on products. A recent report by the President’s Council of Economic Advisers lays out the dual challenges of educating a workforce that is ready for the jobs of the future, and the uphill battle of transitioning to an AI-based economy. This report is great reading for directors as they consider the role of the corporation in society, and could help the board shape individual company strategy in critical areas like innovation, talent development, and long-term value creation.
You can see, hear, and learn more about these trends at the 2017 Global Board Leader’s Summit.Stay tuned for information about our new director-focused, curated tour of the 2018 CES show next January.
The National Association of Corporate Directors (NACD) counts nearly 17,000 directors and governance professionals among its members, and we’re proud to say that they are engaging in constant and committed learning in the spirit of doing the best for their companies.
We hear these questions over and over again from our directors: “What do my peers care about right now?” “What’s the next big issue for directors?” I think that you can tell a lot about what someone values by what they read, so it’s always fascinating to take a look at the reading trends of our membership. Their choices in 2016 reflect commitment to evergreen topics (director compensation, governance benchmarking, and finding a new board seat) and investment in understanding ever-evolving, of-the-moment risks and board-specific concerns (cybersecurity, ethics and compliance oversight, M&A, and strategy).
Below are the top 10 most-read NACD reports, surveys, and papers from 2016. If you haven’t picked up these resources yet, now is the time.
2015-2016 Director Compensation Report – NACD and compensation consultancy Pearl Meyer’s perennially popular survey on director pay helps boards benchmark their pay by analyzing how the subtleties of committee participation and the changing governance landscape impact pay structures.
Cyber-Risk Oversight Handbook – According to our annual survey of public company directors (mentioned above), 29 percent of directors believe that cybersecurity expertise needs to be strengthened on their boards to conduct sound oversight. Our handbook has never been more relevant, and bonus: it has a stamp of approval from the Department of Homeland Security.
Governance Challenges 2016: M&A Oversight – There was a clear member focus on M&A this year, and this piece united the perspectives of several of our content partners to offer the most recent thinking on director oversight of that topic.
Looking for more publications to strengthen your board’s work this year? Visit our topic-specific board resource centers.
Our 1,300 attendees represented just about every state, 15 countries, and nearly 30 percent of the Fortune 1000. And 60 percent were “Summit regulars”—they keep coming back for more.
Couldn’t join us live? We’ve got the ultimate recap (in no particular order). Here’s what you missed.
Dancing With the Start-Ups
We no longer live in the Mad Men era, when several large brands dominated a particular industry. Start-ups are changing the business landscape and the ways in which we live and work. In partnership with KITE and KPMG, Dancing With the Start-Ups was a competition that invited 12 promising start-ups in three industries to pitch their company in four minutes—and the winner received a prize package worth $30,000. Read this press release to find out who won.
The No. 1 Risk Your Company Is Likely Overlooking
Conversations about culture risk dominated the Strategy and Risk Board Committee Forum and other breakout sessions. Discussions focused on red flags, establishing a stronger onboarding process, and concrete methods for fully engaging board members in their duties as directors.
Diversity was not only embodied and discussed during its eponymous half-day Symposium—which focused on the realities of unconscious bias, building the twenty-first century board, and unlocking innovation through diversity—but also was enhanced by the diverse industries, attendee experience levels, and types of companies represented at the Symposium, as well as the learning formats, input, and content of each session throughout the entire Summit.
Back by popular demand, this session was standing room only. Whether you were seeking your first board seat or your fifth, “Landing Your Next Board Seat” offered practical takeaways for directors at all career levels.
“Society needs financial wealth . . . but it matters how you make the money,” said Rajendra Sisodia, cofounder and cochair of Conscious Capitalism Inc., and director of the Container Store Group. “Businesses not only create—they can destroy financial wealth, as well.” This keynote by Sisodia was followed by lively discussions on how to develop a higher-ambition board.
Exclusive Opportunities for NACD Fellows
To recognize NACD Fellows (479 in attendance!), several special events were held, including a reception that offered a sneak peek of Innovation Nation, exclusive access to content, networking, and a special gift.
Golf Simulation, Virtual Reality, and Georgetown Cupcakes
Here are just a few of the glowing reviews attendees left at the end of Summit.
“Summit was the best ever, by a wide margin. This year, you made it a must-attend event!”
“This is the best conference—I [have attended] every year for four years running—the most innovation, the best new governance ideas, and the best networking. Thank you!”
“Fast paced and exciting! I loved the emphasis on introducing us to innovations happening in the business world today.”
“Thank you for leaning into conscious capitalism and socially responsible business. I’m pleasantly surprised that NACD is so progressive in [its] thinking.”
“NACD has become a thought-provoking forum for the future of business. Governance is important, but is table stakes. Kudos for being on the leading edge of business sustainability and disruptive strategy.”
Like what you’ve heard?MARK YOUR CALENDAR AND JOIN US IN 2017