What Does Your Board Want Out of AI?

Increased profit margins, reduced headcount, greater productivity, ROI, all the above. What exactly do corporate boards want out of AI? And how can you make sure you deliver on what they expect to see?

No, no, no, don’t ask ChatGPT, just listen to this episode. Hi, I’m Courtney Baker and this is AI Knowhow from Knownwell, helping you reimagine your business in the AI era.

As always, I’m joined by Knownwell CEO David DeWolf, Chief Product and Technology Officer Mohan Rao and NordLite CEO Pete Buer.

We also have a discussion with David Evans, the founder of ArcSyne about how AI can help CEOs, investors, boards and leadership teams plan for the future that’s increasingly uncertain. But first, we all have to answer to someone or something.

And if you’re an executive of a high growth company, chances are that something you answer to is a board. So what are boards looking for in their portfolio companies when it comes to AI? I sat down with David and Mohan recently to break it down.

David, Mohan, I have a secret goal for our podcast listeners. I don’t know if you knew that. Didn’t know.

But I do. It’s just, you know, we recently had a conversation about budgeting for AI and, you know, getting ahead of the next CEO memo that tells you, you can’t hire anyone. I like to help our listeners kind of get ahead, look smart, you know?

I want everybody listening.

You might be talking to the wrong people then.

Not at all. I’m actually talking to the exact right people for this conversation, because both of you have been in a lot of board meetings in your lives. It’s still in quite a few board meetings, both of you.

And so we want the inside scoop on what our boards actually looking for when it comes to AI. It’s a buzzword. What are they looking for?

And how do we respond when it’s brought up in the board meeting? How do we think about it ahead of time so we’re not caught off guard, that we really have a great response for what’s happening with AI?

I’ll give you two words. And these two words are actually informed by, I literally just got out of a board call about two hours ago. And so I can tell you what I was looking for.

Deliberate execution. And this was literally a budgeting exercise coming with first initial thoughts for entering into the budgeting season and updating models and starting to look at it.

What I was looking for and what I saw was very deliberate focused execution or focused plans for execution around where we are going to use AI to transform our business. A viewpoint on, here’s how our business model is going to be transformed.

Here’s what that might look like. And here’s very specifically with hard dollars mapped to it, exactly what we’re going to do. And, oh, by the way, here’s what we expect the return is going to be when we do that.

And this is the first year that those dollars aren’t kind of nebulous, like investment dollars we need to play around with AI. No, no, no, there’s been plenty of time now.

We’re talking at least a year and a half of experimentation time and doing pilots into this. This is deliberate. We’re going to execute execution.

Okay.

All right, hot off the presses, people. If you don’t have a plan, it sounds like you need to be getting one real fast, okay? Because we need some deliberate execution, which I think probably means you need a plan.

So if you don’t have that, get going. Okay. So Mohan, what about you?

Any thoughts?

You know, if you’re a board member, if you’re a board, you should be generally thinking of these three top items. One is the ROI and business value of the initiatives. Secondly, it is about the execution and organizational readiness.

And number three is about risk and compliance. So these are generally, I would say, your top three, right? So a lot of boards have audit committees, cybersecurity committees, so on and so forth, right?

So if they were a pretend AI subcommittee of the board, I would say these are the top three things that they should be worried about. So as each of these items come about, they should be asking questions about business cases and not a demo.

It was cute to see a demo two years ago, but now you should be asking about business cases, you should be asking about AI governance, you should be asking about security, right?

This is now starting to mature from early curiosity to really getting competitive advantages, and this is the type of governance that the board should offer.

Are there specific questions that you hear come up regularly that you feel like, hey, you should probably be prepared? Obviously, you named some Mohan, but are there others that maybe are unexpected that you would advise somebody to be ready for?

Yeah, I agree piggybacking off of what Mohan said. Boards are there for strategic direction in governance, right?

At the end of the day, that’s what it is, and part of strategic direction in governance is exactly what he talked about, about looking at the capabilities and the preparedness to execute and all these types of things, and you’re not there to make the

decisions, you’re there to ask the questions in order to tease out the right answer and help management come to the right decision, and then sometimes governance means saying no, but 99% of the time, that’s not the case. I would say probably the most

common question that I’m hearing right now is about business model transformation. We have now been in two years of post-Chat GPT world, and it wasn’t four months into that world, you know, in early 2023, when everybody started to recognize this is

going to totally transform the way we run our businesses. If after two years, you can’t articulate very concisely a theory of how your business model and your industry is going to transform, I think you’re in trouble.

You better have grappled with this. You better know the technology well enough. You better have run enough experiments to be able to have a point of view on that.

And you should be, with this budget, putting into place very concrete initiatives to begin to execute towards that vision that you have, of where that industry is going, and how your business model is going to transform.

To me, that’s the number one question right now in this budgeting season.

I think there’s a matter of reason here also, which is many board members that I interact with are pattern matching against decades of technology hype cycles.

So they are asking the tough questions, because being through so many of these cycles, you know, what is the impact? Have the management team mapped out the risks well?

Is this a core competency, or are they just kind of talking about this becoming a core competency? Because ultimately, one of the most important roles of the board is to protect and enhance shareholder value, right?

And these types of investments are super important. Either they can enhance the shareholder value a lot, or they can deplete it. So these questions are really important, as well as all the risk and compliance aspects of it.

So management teams, get ready with these questions.

Courtney, I think the other thing that goes into this as well is a dynamic of the health of your board. A lot of boards get stuck on operational reporting, and looking in the rear view mirror.

Great CEOs, great Chairman know how to facilitate a board to really help make sure that the board is driving management to look through the windshield, and to look down the road, and to see around the curve.

And so I think management teams should be coming with these plans of deliberate execution and all the things we talked about.

But I also think there’s a preparation for board members to make sure that board members are surveying the landscape and understanding the analogies that are out there. What startups are coming and attacking and threatening the space?

If you don’t know and you can’t figure that out, ask your management team to come with a competitive analysis and specifically to highlight what are the upstarts, right? Because every single industry right now is ripe for disruption.

And so understanding those macro threats that are out there, understanding the dynamics, adjacencies, right? Adjacent markets where I may not be competing right now, but maybe all of a sudden with AI can encroach into my territory.

Other just totally separate industries and how their business models have already changed, right? Industries don’t all change at the same time. Some goes faster than others.

Knowing that landscape, being attuned to that landscape, and really helping to ask questions that lead management, to think further down the line around the corner, I think can be a very helpful thing for board members to be doing right now.

That’s such great feedback of it’s not just about AI and how it pertains to our business, but how is it impacting everything around us, which also impacts us, but really interesting shift on the lens of preparing for board meeting and being aware.

David, Mohan, I think this is really interesting conversation. Everybody listening, I think you’re going to get an A plus at the next board meeting. I hear that’s what they do.

The board members after the meetings, they great everybody, and you’re going to get an A plus. That’s what they do, right guys? No.

If you’re not looking forward to board meeting days, you’re doing something wrong.

Oh, interesting.

Should be a lot of fun.

Okay, let me go think about that.

Those people that don’t love board meetings are the ones that typically manage their board differently than they manage their business.

But if you are actually doing it right, you manage the two the exact same way.

You’re just exposing the way you manage your business to your board, and what it does is it gives you an awesome opportunity to take a step back and to see the big picture and see the forest from the trees in a way that you can’t in the day in and

day out. So it should be a lot of fun and a big relief and a lot of productive conversation that helps make you think differently if you create that healthy dynamic.

I agree with that. The way I always treat board meetings as management is that it’s not perfect. If they expect perfection, it’s been many years since they’ve had operational experience.

But what they should expect is discipline and transparency and paths to success, right? So that’s what, if you go in as management to those three things, then it generally go well if you have a good board.

Well said. Yeah. And I think getting y’all’s feedback, because you are sitting on both sides of those rooms a lot of time.

So I think this feedback is really helpful. And again, for everybody listening, hopefully, your next board meeting, you are well prepared with the questions that may be coming your way. David, Mohan, thank you as always.

Takes a ton.

Thank you.

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David Evans is the founder of ArcSyne, an AI-powered platform designed to help executives plan for an increasingly uncertain future.

He sat down with Pete Buer recently to talk about where the idea for the platform came from, and why AI is uniquely suited for a task like this.

David, welcome. I have been looking forward to this for some time.

Me too, Pete. Great to be part of this, and thank you for having me.

I know your background, but let’s do the audience a favor and give them a sense of where you’re coming from and what you’re up to these days. Could you talk about the company, your role and where AI fits in, please?

Yeah, totally. So my company is ArcSyne, and you spell that A-R-C-S-Y-N-E. I’m the founder, and it’s an early stage firm, basically piloting a forecasting tool for use by private equity advisors, porcos and the funds, investors and global MNCs.

And it is a wrapper AI firm, meaning AI is central to the whole business. And that means that we’re not coming from the people side, and then figuring out how AI fits in, we’re coming from the AI side, and figuring out how people fit in.

It’s a little bit different.

Well, I’d like to go into some detail about the tool, and what it does, and how it was built, and so forth, because there are object lessons for audience members, leaders of professional services, businesses, in how to think about doing work

differently. So can we get a ground level understanding of the tool that you’ve built? What does it do?

Yeah. So Pete, ArcSyne’s goal is basically to be the best way for CEOs, investors, boards, and their leadership teams, to build scenarios that make sense of the exploding number of futures that we are now facing in this paradigm shifting moment.

So AI and trade and monetary shifts and climate change, all these things happening, coming together, interacting in surprising ways.

How do you remove the blind spots that really cause a lot of people and leaders to freeze up a little bit on decision-making and make that future more understandable so they can take action?

So basically, we’re helping companies see reality, really, for what it is, even within the year, and make these tools, make the idea of these scenarios dynamic, updatable, with a 100% traceable reasoning layer, so it’s free of hallucination and you

can believe what it’s saying. And you can interact with it, of course, in a way that allows you to build trust in what it’s doing, so you can build trust in yourself.

I remember when tariff policy was changing earlier in the year, kind of each time the wind changed, and you were on to it early and smart with the tool, just as one way to demonstrate the use case.

Can you talk about how the tool was helpful to interpret some of what was going on on the trade policy front?

It was really interesting. So I began developing this kind of as a side project actually, although I knew I was going to be focused on something AI related. And I was sort of like, God, it’s like the world is exploding, right?

And my own assumptions are, I don’t even know what to believe anymore. I mean, it was really unclear. And when the tariff thing hit on Liberation Day, it just felt like we were completely in another world, right?

So I began this prototype, I had begun the prototype already and began to update it daily.

And I began to see that the likely, you know, one I built into this kind of Bayesian reasoning system for anyone who wants to go in deep on that, do your own research, as well as game theory.

And what was coming out of it was really beginning to surprise me about like the way in which game theory would interpret what was going on from the US side and the Trump administration side.

And then how that would provoke different kinds of responses internationally. And it felt like I was getting a bit of sense of like what a future would look like, as opposed to feeling kind of panic, right? And that was that was stabilizing.

And a colleague of mine is in a private equity advisory firm and he happened to see it and he got incredibly excited. And that’s pretty much how it got off the ground. So that’s the story on that.

So automatically my mind goes to supply chain or manufacturing as I’m trying to draw out a field of application.

You know, where in the business is someone gonna take the outputs and the guidance from the tool and do something with it?

Yeah, totally. One thing I also really want to make central to this tool is actionability. This is built back from the need to take action.

You know, you have two problems in the market right now in solving for this. One of which is that scenario development is often very abstract, long-cycle process.

People who have knowledge of business might think of the Shell scenarios back in the 70s, you know, that look ahead five years, you know. So, it’s kind of academic and it’s not immediately addressable.

And then you have like the poor FP&A guy who’s sitting there being told to build scenarios with these new tariffs and changes one or two numbers, has no idea what’s interacting with what and doesn’t really have a big picture.

And those two are just not good solutions. So, the idea was like building back from what could you actually do right now.

And so, one of the central premise of the action ability is what are no regret moves that will work in any scenario or at least maybe the dominant set of scenarios that you can do now, as well as identifying things like the newly regrettable moves

that may used to have been like, you know, tried and true things you could believe in like last year plus 4%. That’s probably not true anymore. And so, what do you not ever need to do right now? What do you need to take off the table?

And so, the way it’s been designed is to focus down on particular functional areas so that in particular, the first applications have been in GTM and pricing.

And so, building specific pricing playbooks and outlines of what you would do in pricing, tariffs obviously relate to that strongly. Go to market, you know, super sensitive to all these changes as well.

And that’s where people have begun to get the value is seeing like, immediately you get a playbook coming out of this, that then is dynamically updatable as well, right?

So, it’s not just like, oh, that PowerPoint we saw two weeks ago and even now, like with the latest changes, it’s already out of date. This is the kind of thing you interact with that updates the probabilities and updates the playbook.

Nice, nice. So, as you know, our listening audience is predominantly professional services leaders. How about industry-specific applications for leaders in that space?

Yeah.

So, I’m working at the moment with two professional services firms in the private equity advisory space.

And the place that is fitting in is kind of like, I don’t know, you might call it two ends of a spectrum, which is actually quite nice because they make a good pair. The first part is in proposals, right?

So, this allows you to enrich the understanding in your proposals of how you’re relevant, right? Given all the things that could happen even by the end of this year, or certainly by Q1 of 2026. So, it’s increasing relevance of proposals.

And then inside the engagement, it’s enabling the recommendations to work across those different scenarios and retain relevance there as well.

And then finally, it becomes a mechanism by which an advisor who is on a like in one particular case, kind of a year long onboarding engagement after a major private equity influx, whose advisor to the CEO of a billion dollar firm.

And he’s using it basically to know how to structure his conversations going in to the CEO, right? And ultimately then to pass that into the CFO and to the FP&A team.

I see a fair amount of commentary on LinkedIn around how it’s not good enough to use AI as a search tool. We have to actually really use it. If I’m a leader of a business, David, I don’t have a ton of time on the side to be experimenting.

What would you guide me to do? Would you tell me to build something in particular? How do I engage in a way that’s going to give me the most bang for the learning book?

Yeah, totally.

So the first thing I would say is invest and make sure you’re accessing a reasoning model like O3, right, and not go for the regular model as good as those are.

What you need to do as a leader is understand how to interact with it when it’s reasoning, right? That means you can see a chain of reasoning. It thinks and it goes and searches for information in a structured way.

I would say, introduce into its serious credible business cases, you need to have evaluated.

Don’t be afraid and this is why it’s really important also to make sure you purchase a subscription that, if you’re concerned about confidentiality, you purchase one of the subscriptions that is where your interactions do not train the models, right?

They’re basically in a siloed space, so you’re not actually accidentally feeding confidential information back into OpenAI or another large language model vendor.

So you need to go through a process of like, hey, I’m thinking of acquiring this company, or I’m thinking of making a significant structural change in my company, and here’s my situation in detail.

Here is the balance sheet, the income statement, here’s our growth projections, here’s what the teams look like. I want to model out what I think might be a better version of how my org structure looks in six months’ time.

And so what you do, and this is also crucial, I’m seeing this as a real, I don’t know, a kind of a behavior phenomenon of the older executive leader, which is to go in, ask one question, get one answer, you have one more interaction, and then go, I’m

done. You’re not done. You need to keep interacting, right? You need to keep going until you refine your phrasing clearly enough so that it’s can start to teach you.

That’s going to take you 15 to 20 minutes more work, right, to do that. And actually, that’s not that big of an investment for something this game changing.

You cannot afford to get like 15 minutes of that amount of time, the time just to go grab a coffee, to get in your way of understanding what this tool can do. So that’s the way I would think about it.

And in that 15 minutes, the end result doesn’t look anything like where you started typically, right?

It totally can totally blow your mind.

That’s the other thing is that it can reveal to you areas that this is also key, is that as a leader, what you’re looking for are the capability or the revelation from things it can do that human beings cannot do.

That is very different than thinking about how do I purchase an engagement from Deloitte to go and automate out the workflows of my client services entry level staff in the firm. This is really about something higher level.

You need to start to focus it on things that you cannot do. Not that you can get somebody else to do or you can model it out and, okay, now I can get this thing to do something that a person can do but less expensively.

You need to focus it on things that you can’t do at all and human beings can’t do. That’s where the power is.

Let’s roll the movie forward just a little bit. We’ve got a leadership team that’s invested to really and truly understand the capabilities of the technology and we’ve done a decent job looking across the business and training in a similar fashion.

How do we think differently about resourcing in the business if we now have people who are capable of understanding and leveraging tools in the way that we’re talking about?

Yeah, totally.

I think there was a cartoon I saw recently about somebody coming up with a brilliant innovation that will allow, this is like back in the 1910s or something like that, horses to get on bicycles so they could go faster, and not really understanding

that a car is going to totally displace the way transportation works. I think that one of the things to think about right away is that the biggest concern you can have inside of your particular industry space in your competitive field, is a native AI

building ground up workflows that are completely different than the way the traditional industry player works. You have to go through and challenge yourself to think 10x different, not 0.1x different, or 1.1x different about what it is you’re doing.

That means that the way towards what the teams look like, sure, initially, there’s some great benefits to be had by doing some automation. Automation is the history, is basically the ringing theme of all the whole history of human innovation.

In some sense, this is no different. I remember the statistic, there were like 3 million secretaries, 99.99% women in the year 1955, and now we have 12 secretaries or something like that. And so, yeah, you know what?

The world survived and things went on and people did keep getting jobs, right? That’s clear. So automation is not something you should be afraid of in doing this, but you’re not gonna win by automating out existing workflows.

You’re gonna win by reinventing the workflows in the space to better serve your customers at a better price point and provide superior service, great experience and all the usual things that you know as a CEO.

But I would understand like I would say it’s the off-site. One is run to that off-site. You know, it’s urgent.

And think a little bit about what would the competitor in your space do if completely freed of the legacy infrastructure and HR model and technology if they were to come in?

And how would that cause you to think beyond the next step beyond the automation? I think ultimately you got to think about this in terms of like imagine three companies and here’s my little hierarchical model of a company, right? A little pyramid.

And they’re clones of each other. One of them has no AI whatsoever, right? That’s unlikely, but it’s a possibility.

The second one is automated out the lower layer. They only have one choice. They can use or not use AI and they can only apply it to one thing.

The second one has automated out the lower layer. Fantastic thumbs up on cost. Vestor is really satisfied about that.

Even there could even be some service level improvements and consistency that can come out of that. That’s for sure the case. The third one has made a very different choice.

They’re applying AI to the top, right? So they’re using it in a structured and systematic way that is freed from hallucination where they can trust the chain of reasoning, bringing it into ELT conversations. The CEO uses it, uses it one to one.

The board members use it, the investors use it. Which firm is going to win? Which firm are you most afraid of as a competitor?

I’m for sure worried most about the one up here. This is going to take this, even if the human layer is still here, it’s going to move this into a space that is more competitively advantageous than just stripping out that layer.

As good as that can be. Of course, you can do both. That’s terrific.

But I would say that’s one of the things that really excites me about how HR and org structures start to need to be informed by is what the leadership team is going to be doing with these tools.

And your mention of the offsite. This is the topic, I hope, at least sitting on the list of five that executive teams are going to spend some time on because it’s a very different game planning for work going forward.

Absolutely. I mean, again, like back to that point around, it can’t be last year plus 4%. We’ve all seen that.

We all know that budget. We know what that looks like. This year, it’s got to start being, what does the most terrifying competitor in your space look like?

And how do you begin to move into the space where you can compete against that and win?

So is it last year minus 10%? Last year minus 10%?

There was that, I think it was back in the 2000s, there was a craze for the zero-base budgeting approach.

And I do remember the challenge of some clients at that point, really describing, holy cow, the zero-base budgeting means I have to justify everything from the ground up.

The point is not to be, that’s kind of a scary way to look at it and very cost-focused. I really think it’s much more about understanding the opportunity.

And when you go into this offsite as an executive team member, and you’re already familiar of what it can do, because you’ve spent a decent amount of time repping with the tool to think through what you can do, and you’ve interacted with others, and

you’ve had some experience across the leadership team, learning about what it is you could do and maybe do differently. If you come into that, you’re going to find this to be an incredibly exciting creative opportunity.

And that’ll just reframe how you think about your cost structure.

Zero-based budgeting does have a bit of a dark cloud around the term, because the assumption was that you’d get to something less expensive.

I think in this context, it should be a fun thing because we’re talking about whiteboarding the way work is going to get done going forward in the organization. And maybe it’ll cost less. I don’t know, maybe it’ll cost more, but it’ll be better.

I think we have to let go of our preconceived notions of how this thing is going to shake out and give ourselves over to a real and genuine exploration of how work can happen differently.

That’s right. I mean, if you’re open to this, this thing is incredibly fun. I’ve had, I mean, it’s, I guess, geeky in a sense that would be, for those who know me would know that that’s something I would say.

But this has been a blast. I mean, I have learned so much about the way these tools work, the way I work, I’ve learned from the tool. I’ve kind of blown my mind by VypCoding Python scrapers and stuff like that.

And like, oh my God, like this is incredible, right? And then the ability for an LLM, which is a neural net, right? To take this content, to take content and see patterns inside it, that you as a human being are just really not capable of doing.

Maybe unless you take enough psychedelics, but you don’t really want to do that in making decisions. So, this is where it becomes really advantageous in a structured and focused way.

When you kind of like denuded of the potential for hallucination, and there are definitely tricks and so on to know how to do that, then you can see, you can let it discover things that reveal to you opportunities that just open up your mind

enormously. And that’s fun. That is just really fun.

Thank you for being here, David. It’s been terrific.

Thank you so much, Pete. It’s been a pleasure to be here.

Thanks as always for listening and watching. Don’t forget to give us a five star rating on your podcast player of choice. And we really appreciate it if you can leave a review or share this episode on social media.

At the end of every episode, we like to ask one of our AI friends to weigh in on the topic at hand. Hey, chat, GPT-5, great to meet you. Today, we’re talking about what corporate boards want out of AI.

So what do you think?

Boards are mostly looking for AI to boost profits, cut costs, and keep them competitive without blowing up risk. At the same time, they want clear proof of ROI, something tangible they can show investors and stakeholders.

And now, you’re in the know. Thanks as always for listening. We’ll see you next week with more AI applications, discussions, and experts.