Unprecedented Challenges Should Prompt Boards to Broaden Their Sources of Information

A rapidly expanding scope of challenges is prompting corporate boards to re-evaluate the adequacy of the information with which their staffs provide them. Traditional sources such as financial reports, regulatory and litigation briefings, and strategic commentaries are not enough to keep them informed about a host of new issues, including the impact of new technologies such as AI, changes in workforce culture, and the evolving attitudes of new generations. The failure to get complete information about these new issues may hobble the exercise of fiduciary duties and create unnecessary exposure to third party criticism –  or worse.

Two new academic studies – one from the Massachusetts Institute of Technology and another from the Institute of Politics at Harvard Kennedy School – are useful examples of unconventional sources that provide valuable guidance on issues breaking through to the board agenda.

The MIT Study

The MIT study has drawn public attention for its conclusion that artificial intelligence can already replace almost 12% of the country’s labor market. The study was performed with the assistance of “the Iceberg Index”, a computer simulation designed to provide a forward-looking perspective on how AI may affect job tasks, skill, and labor flows, well in advance of the impact becoming a reality. The index seeks to support critical workforce decisions, e.g., where to invest in training, which skills to prioritize, how to balance infrastructure with human capital. The goal is to ensure a navigable transition for AI by measuring exposure before its actual adoption reshapes the workforce, i.e., preparation rather than reaction.

The study concluded that the potential, visible displacement impact of AI on jobs (e.g., layoffs and displacement in the tech, computing and IT areas) represents only 2.2% of the total wage exposure of $211 billion. The greater exposure lies with less visible displacement (e.g., routine jobs in HR, logistics, administration and finance), which represent $1.2 trillion in wages. The study also warns of accelerating change that is outpacing f traditional planning cycles. This concern is reflected in a 13% decline in early-career employment in AI-sensitive jobs.

In these and other ways, the MIT study is highly relevant to the board’s duty to exercise oversight of human capital in general, and of technology-driven worker displacement in particular. Emerging thought leadership reflects an increasing expectation that boards will ensure that their companies “adopt emerging technologies in ways that augment human capabilities, rather than replace them”. Indeed, the estimable Martin Lipton, Wachtel Lipton Rosen & Katz founding partner, advises boards to “consider in a balanced manner the effect of technological adoptions on important constituencies, including employees and communities, as opposed to myopically seeking immediate expense-line efficiencies at any cost.”

Obviously, the issue of AI’s worker displacement is not new. The latest government jobs report, and a recent article in The Wall Street Journal, confirm broad unease across the workforce. Yet the importance of the MIT survey, and other reports like it, is that it provides detail that might not be available from traditional information sources but is important for a board’s human-capital planning.

The MIT survey is not an easy read but is well within the capacity of most sophisticated directors to understand and appreciate. While prepared primarily to assist state and local governments in their planning, its results (and those from similar surveys) provide the board with  intelligence for critical workforce planning and strategies. This, especially, with regard to investments in training, skill prioritization, and balancing infrastructure with human capital.

The Harvard Kennedy Study

The second, though markedly different, study is the recently released 51st annual Harvard Youth Poll from the Institute of Politics at Harvard Kennedy School. This poll focuses on members of Gen Z (the 18–29-year-old age bracket) and finds that instability –  financial, political, and interpersonal – has become a defining aspect of their lives, shaping their outlook on the country and their own futures.

The key findings of the poll detail this instability. They include: (i) AI is amplifying uncertainty about the future of work, with young adults expecting fewer opportunities, greater threats to job security, and diminished meaning in their careers; (ii) Trust in institutions continues to erode, with colleges and immigrants standing out as rare sources of strength, while the mainstream media and political parties are viewed more as threats than assets; (iii) Social trust is unraveling, as many young Americans avoid political conversations, fear judgment for sharing their views, and doubt that people with opposing perspectives want what’s best for the country; (iv) Vaccine confidence shows clear fault lines, with strong trust in safety far from universal and misconceptions still present; (v) Young Americans offer overwhelmingly negative descriptions of Democrats and Republicans alike; and (vi) Most young Americans reject political violence, but a meaningful minority express conditional tolerance, driven less by ideology and more by financial strain, institutional distrust, and social alienation.

Poll directors characterize the overall results as sending a discouraging message: The systems and institutions meant to support them no longer feel stable, fair, or responsive to Gen Z. This is primarily because the generation feels “unheard and unprotected in a moment of profound uncertainty.” Indeed, the international Gen Z cohort has recently been in the news as playing a major role in the change of the allegedly corrupt government of Bulgaria.

The Harvard study is similar to another significant social survey from earlier this year, conducted by the public relations firm Edelman. In Trust Barometer, Edelman described the evolution of a “Grievance Society,” in which economic fears have transformed into grievances that arise “from a conviction that the system is unfair, business and government make things worse, and the rich keep getting richer.” This climate of grievance reflects what Edelman refers to as “a profound shift in popular sentiment…beyond political polarization to aggressive advocacy for self-interest.” Some of the more violent events of 2025 to date seem to have confirmed Edelman’s sense.

The governance relevance of the Harvard survey is that it shows the growing importance of board awareness of emerging social shifts that could have direct or indirect impact on the issues for which boards are responsible. This  suggests a declining trust in institutions. And, as most boards are aware, trust is a significant asset of most business organizations. It is thus important for boards to stay aware of the elements of trust, organizational ethics, integrity, and corporate responsibility.

The Big Picture

The MIT and Harvard studies carry significance for governance beyond their core conclusions. They are examples of the broader, nontraditional sources of data to which boards should be exposing themselves. As the duties and responsibilities of boards increase, there is much value in revisiting the scope and timing of the information  with which they are provided. Key governance support such as the corporate secretary, chief governance officer, and chief legal officer is encouraged to collaborate on finding new sources of information and data that would be responsive to the board’s widening duties.

Michael W. Peregrine  is a retired partner at the law firm of McDermott Will & Schulte and a fellow of the American College of Governance Counsel.

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