Just a short time ago, generative AI (GenAI) arrived in the boardroom as the rapid spread of the technology triggered prophecies of mass redundancy and obsolete business models. From a recent survey, I found that many directors have done something more grounded: they tried to learn about GenAI. And most of them didn’t fire people to replace them with technology.

Why it matters

Public discourse on GenAI has swung between utopian promises of trillion-euro value creation and dystopian warnings of mass layoffs. However, there's been little systematic data on what boards, who are the actual decision-makers overseeing this transition, are doing and thinking in practice. My survey of directors from 83 mostly large European and United States-based firms, conducted in April and May and heavily weighted towards industry (46%) and finance companies (22%), offers a snapshot of the current state of play.

The study

I distributed a short questionnaire through LinkedIn and to participants of INSEAD's Executive Education programmes on corporate governance. Questions covered the consequences of GenAI adoption on strategy and workforce, collaboration strategies chosen to exploit AI, as well as the perceived hurdles to AI rollouts in organisations.

Close to half of respondents reported moderate productivity gains in specific functions. A further 18% reported “significant or transformational impact” from GenAI. For a technology barely three years into corporate deployment, two-thirds of firms reporting measurable or emerging benefits is a respectable return.

The workforce picture is more mixed. Nearly half of directors confirmed that AI had already displaced tasks and roles in their organisations. About half also indicated that their companies’ headcount growth in the most exposed functions was flat. However, only 11% reported a headcount reduction following GenAI’s arrival. 

Among respondents from companies where AI has displaced tasks and roles, 57% reported that their top response was to prioritise AI-literate hires; 40% reported reskilling and redeployment of affected employees into new roles; while 16% prioritised reducing headcount. 

When asked to rate the barriers boards faced in overseeing AI, most directors pointed to their own AI literacy. A vast majority of the respondents reported relying on external partnerships to bridge what they couldn’t yet do alone: 54% did so through AI vendors, 24% by placing alliances and ecosystems at the heart of their AI strategy, and an ambitious 6% by orchestrating AI ecosystems of their own. Only 5% reported going solo. Borrowing capability when the environment is changing rapidly is exactly what the strategy textbook would advise. 

The takeaway

The pattern is heartening. Firms that redeploy workers rather than shed them are more likely to keep their unions happy and their future options on the labour market open. I also believe that such firms will meet the next phase of automation with a workforce that trusts them. Confronted with the most hyped technology since the internet, company directors have reaped real gains, protected their employees, admitted what they do not know and looked to partners to learn.