Data and AI increasingly important board component

12/11/2023
105

Right knowledge and skills often still missing in AI

Amsterdam, Nov. 7, 2023 - According to 65 percent of all executives with AI and data responsibilities, their function did not exist five years ago. This is a sharp decline from a year earlier, when this was still true for more than three-quarters of all respondents. This is according to the Data, Analytics, and Artificial Intelligence Executive Organization and Compensation Survey, an analysis of a total of 201 executives with technology positions in Europe and the U.S., conducted by executive search and leadership consulting firm Heidrick & Struggles. Although AI and data responsibilities are increasingly being placed at board level, executives often still lack know-how and expertise.

Especially in the area of artificial intelligence, a significant portion of the organizations surveyed still have some way to go. Whereas nearly half of the respondents stated that their management has sufficient knowledge and expertise in the field of data and analytics, only 29 percent said the same about AI and machine learning. As many as 10 percent of them additionally lack an AI strategy leader within the organization. Remarkably, more than a third of all respondents nevertheless call their performance in AI, data and analytics leading their industry. "Also within Dutch organizations we see data and AI increasingly moving to the top, although this often does not reach the board," states Camilla Reventlow, partner within the Technology & Services practice at Heidrick & Struggles Benelux. "Here, organizations often see AI and data as one and place technology lower in the organization, deploying it mostly tactically and hardly strategically. In that respect, we lag behind the United States. Partly because of this, I recommend that advisory bodies also strengthen themselves with relevant technological know-how."

Practical applications
Currently, the organizations surveyed use the aforementioned technologies primarily for technical support, customer service and product development. For recruitment and HR, only 17 percent are using it, but nearly six in 10 respondents expect to do so within two years. Although this is still unclear. For example, more than half of executives state that they have insufficient financial resources to set up the necessary programs. Reventlow: "AI not only helps with automation and efficiency, but can also filter out biases around recruitment. We ourselves are working more and more data-driven so that we can make even more informed choices. In doing so, we pay close attention to the ethical aspects of technological developments."

Costs and benefits
The fact that technology is increasingly being invested at the board level is also reflected in business results. For example, a whopping 29 percent of respondents tell us that generative AI makes a positive contribution to their financial statements. Nevertheless, it also comes with significant costs, including the salary of AI- and data-driven executives. The study shows that such a position in Europe brings in an average annual salary of over 534,000 euros. That is still considerably less than their American counterparts, who earn over a million over the same period. Reventlow: "High salaries are more often seen in new professions. Because relevant knowledge and experience are scarce, supply-demand is still out of balance for these positions. Eventually that balance will emerge, although with the meteoric rise of AI and uncertainty surrounding future developments, it's hard to say how long this will take."

About Heidrick & Struggles
Heidrick & Struggles (Nasdaq: HSII) is considered one of the leading executive search and leadership consulting firms worldwide. As a trusted advisor, we work closely with our clients to develop future-proof leaders and organizations, offering services in the areas of executive search, diversity and inclusiveness, leadership assessment and development, organizational and team development, and culture and talent development. Heidrick & Struggles started over 65 years ago as an executive search pioneer and has 51 offices in 28 countries. Today, the firm provides integrated leadership solutions, helping our clients change the world, "one leadership team at a time®. www.heidrick.com

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