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The author is Director of the Centre for Corporate Reputation at the University of Oxford and Chair of the Enacting Purpose Initiative.
Artificial intelligence innovation is being integrated into most aspects of business operations. From chatbots to credit scoring, technology is transforming the way business processes are built and managed. These AI systems are currently authorized at the top levels by humans. This should come as a surprise to us all, given the power of AI to make complex decisions at a pace and with an accuracy that humans find difficult to match. In fact, we have reached a point where corporate boards should consider appointing an AI COO.
It may sound like a futuristic idea, but the reality is that it could easily happen soon. Three key factors support this prediction: advances in artificial intelligence technology, the demand for operational efficiency, and the need for data-driven decision making.
First, the implementation of AI technology across multiple business functions has grown exponentially in recent years. Machine learning algorithms, natural language processing, and advanced data analytics have reached levels of sophistication that were unimaginable a decade ago. AI systems can perform complex tasks that require equally expert and agile decision-making, strategic planning, and even creative problem-solving. Humans are not equipped to do this at the scale that AI itself can.
Second, corporations today are expected to find ways to streamline processes, reduce costs, and improve productivity at an unprecedented pace. Stakeholders increasingly expect immediate action to be taken when new information is presented. An AI COO could anticipate, plan, and execute the pace and scale of operational efficiency across a corporate ecosystem in ways that a human doing the same job could not match. Unlike human executives, AI systems can operate 24/7 without fatigue, process massive amounts of information at lightning speed, and make data-driven decisions accurately. For example, an AI COO could oversee supply chain logistics, ensuring that resources are optimally allocated and potential disruptions are proactively mitigated.
Third, AI’s superpower is its ability to make data-driven decisions. Modern businesses generate huge amounts of data, and the ability to analyze it quickly and accurately is crucial. An AI COO should be adept at this. For example, in areas such as marketing and sales, an AI COO could analyze full-cycle consumer behavior patterns, predict future trends, and develop strategies accordingly.
These are powerful arguments, but while AI could fill the role of a COO, it cannot and should not (yet) be appointed to the role of CEO. CEOs have a unique and complex position in corporate hierarchies. Human CEOs must still deal with people-related tasks, bringing intuition and empathy to an increasingly technology-driven world.
AI is also not up to the task of making nuanced decisions and trade-offs required at the regulatory level. Regulators and shareholders expect CEOs to be accountable for their decisions and actions, but AI systems are powered by algorithms and data sets that are not always as transparent or accurate as would be desirable.
While the potential benefits of an AI COO are immense, there are of course challenges that need to be addressed. Trust and buy-in from employees, shareholders and customers would be crucial. There would be a significant amount of initial skepticism to any such appointment that the (human-dominated) board would have to address if it were to appoint an AI COO, particularly when it comes to employment decisions and the transparency of operational decision-making. But an AI COO should become a reality at one of our largest corporations in the near future.