Algorithms: Your Next Board Member?
Hong Kong firm puts a computer program on its board.
July 23, 2014
Earlier this week, Liberal senator, Céline Hervieux Payette, introduced a private members bill aimed at boosting the number of women on Canadian corporate boards. The Board of Directors Modernization Act would require the proportion of board members of either sex to be at least 40%.
It’s a move that is clearly in line with a global push towards greater diversity on corporate boards.
But there’s a whole other group that could be set to rise into the decision-making ranks of global corporations: algorithms. That’s right – a computer program named “Vital” was recently appointed to the board of directors of Hong Kong based venture capital firm, Deep Knowledge Ventures. Vital, an artificial intelligence algorithm, will vote on which companies to invest in – and which ones to leave in the dust. The firm’s focus is on drugs for age-related diseases so Vital can sift through massive amounts of data to make the calls.
While the algorithmic board member is probably a pure play for publicity, plan sponsors could take note: if this catches on, could stress testing software become the next ideal trustee?