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TECH TALK: Tech trust and governance

In the tech world, innovation should not be enough. Governance must be exercised if companies are to be trusted and if they are to achieve a “triple bottom line.” And for us consumers. “trust but verify” should be our motto.

Editors note: Besides following tech developments, our author is a musical composer (Juilliard-trained). He has provided a musical composition for you to listen to while reading this column. This piece is called “Trust Governance?”

Technology is developed and delivered to people by companies, not by universities and laboratories, as some might assume. These companies are run by people who may have different priorities from those of their customers, society, or our planet. When we use products based on technology, the issue of trust increasingly comes up. This week’s column is about the need for the checks and balances we tended to assume were provided by overseeing bodies such as boards of directors and governmental agencies.

There are substantial differences in the roles within a tech enterprise. The four primary roles are governance, executives, managers, and sole contributors. Governance refers to the board of directors, which, in order to provide checks and balances, must be distinct from the executive layer. Unfortunately, this distinction is often not clear in the case of new enterprises.

Scalability must be demonstrated before you even reach the point where these four layers of relationships exist. The interaction among these roles makes possible both idea flow and checks and balances. Although there is some mobility among these groups, they tend to have different priorities and be at different life stages. And they certainly have different responsibilities to each other and to their customers.

When the CEO is Chairman of the Board. Howard Lieberman created this image with the assistance of DALL-E-2, an AI software program.

The theory of the triple bottom line has become recognized recently in the business world. This theory maintains that companies should focus as much on social and environmental issues as they do on profits. When the young CEO of a tech company is also Chairman of the Board, the checks and balances usually provided by a bord of directors can be washed away. The question is whether a young and ambitious CEO knows or cares enough about the triple bottom line.

Yes, companies have to make money and obey the law, but are there issues of trust and innovation to explore here?  There are certainly examples where the concentration of power has worked well.  In the tech sector, HP, Apple and Bose Corporation were all led by unique individuals who managed to grow from technical capability to management and executive capability all of the way up to governance, where they presided capably and successfully over the board of directors.  But this is not the norm, and most young CEOs will not be able to do this, no matter how large their egos become and how much society deifies them. If the celebrity of the young innovator is allowed to overshadow the need for governance, the larger enterprise will suffer.

Can innovation and trust governance coexist? Absolutely. The board members should bring expertise in tax, legal and innovation issues and should also care about the enterprise’s trustworthiness. The brand, gross margin, and business competitiveness can be destroyed if trust is lost.

Executives have different priorities, and responsibilities. They need to encourage and channel creativity and innovation in order to develop viable products and to grow the business.  This diversity of expertise is crucial for a company to be successful.

Many points of view need to be balanced for trust and profitability. Howard Lieberman created this image with the assistance of DALL-E-2, an AI software program.

Right now, many people are rightly concerned about artificial intelligence. Can it be trusted? Will it harm us? Are there going to be unintended consequences? We have all heard that AI tends to hallucinate and make things up or get confused and spout nonsensical answers, especially when speech recognition is involved in asking questions.

But don’t people also hallucinate, give nonsensical answers, and misunderstand what is going on? Or disagree? We all are guilty of these behaviors at times. Should we trust machines more than we trust each other? Of course not. Just as in our other relationships, they need to be qualified.

If a company or person we deal with regularly seems reliable and trustworthy, we eventually trust them. The same has to be true for computers. Computers do not know right or wrong, or false or true. They have no judgment or natural ability to judge. They read the internet. Do you believe everything you read on the internet? I hope not. There is a lot of manipulation; some is intentional, but much is not. We need to qualify sources and vet our ideas.

We need empirical evidence to support our conclusions and should refrain from engaging in data-free decision-making. Remember, our relationships with technology are almost always relationships with the people who provide it to us to make a profit. The people who play different roles in companies may have differing opinions about how honest they should be or how much they could or should manipulate their customers and each other.

Government agencies have forced many previously ultra-reliable companies to recall products they lied about. What happens if the oversight vanishes or is significantly diminished? My advice is that you should not trust technology or businesses any more than you trust people. Ask what their motivations are and who is making the decisions. Do research, and do not expect AI to hallucinate less than people. People are the ones running the AI. I expect reasonable layers of governance to be installed and maintained for the new technologies. After all, there is oversight regarding food, drugs, air quality, noise levels, and more. When you shop for produce or meat, you notice that not all suppliers are equal. The same is true for technology.

Of course, governance costs money. While startups may not have boards of directors, it is possible that the founder entrepreneurs who run them are actually more trustworthy than the boards of publicly traded companies. Ultimately, it all boils down to people, and people vary considerably in their motivations and behaviors. “Trust but verify” became a common term after Ronald Reagan used it in the context of nuclear disarmament discussions with the Soviet Union.

By the way, do not disparage everyone who hallucinates; some of them are where tomorrow comes from. Every invention, product, process, and solved problem begins with a thought that is not yet real. Please remember that some of them, not all, do become real. Everything around us that is not a pure product of nature began as an idea. Doubters called them hallucinations at first, but many of them have contributed enormously to our progress and well-being.

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But Not To Produce.