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January 2023

AI and the Future of Chief Ethics Officers

​​There are some core economic principles that remain as relevant today as when they were first espoused. One is “creative destruction,” which is most identified with Austrian-born economist Joseph Schumpeter. According to Schumpeter, creative destruction is the “process of industrial mutation that continuously revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.” Schumpeter’s wisdom has been on my mind a lot lately. 

I first heard about OpenAI’s ChatGPT in December while listening to The Journal, a business podcast.  Since then, it seems as if every day brings a new article in the business press about what the accelerating rise of artificial intelligence (AI) means for people, society, business, and the world. We are living through the earliest stages of this process, and the future appears fraught with complex and challenging ethical dilemmas as a result. Ideally, processes will be implemented that allow for the ethical and beneficial use of AI.  

The mission of OpenAI, as shared in a post co-written by co-founders Greg Brockman and Ilya Sutskever,  is to “ensure that artificial general intelligence (AGI) – which we define as automated systems that outperform humans at most economically valuable work – benefits all of humanity.” On January 23, Microsoft announced the third phase of its partnership with OpenAI, as well as its most recent multi-billion-dollar investment in the company. 

Is Microsoft’s ongoing investment in OpenAI indicative of a seminal moment in societal evolution? I would say so. And, as with other societal shifts, today’s business leaders will need new tools to make sense of the changing landscape, determine lasting trends, make principled decisions, and acknowledge the unintended consequences that accompany complex advancements like AI. Adding to the complexity is the ESG movement (a strategic framework for organizations, which considers the needs of internal and external stakeholders). ESG demands that CEOs manage a complex set of stakeholders, including investors, employees, the environment, the government, board members, etc. 

Is today’s C-Suite prepared to identify and address the opportunities and threats inherent in AI? And are they equipped to do this while managing potential trade-offs between short and long-term goals, profits and community relations, and “authenticity” and efficiency? 

I submit that leaders should christen a new executive band role as the “Next-Gen” Chief Ethics Officer.  The “traditional” Chief Ethics Officer generally reports to the Chief Compliance Officer and their general responsibilities are defined as: 

  • Reviewing a company’s operations and codes of conduct to evaluate how effectively they practice ethics 
  • Identifying new ways to implement ethical practices in a business 
  • Ensuring that all company policies are ethical and adhere to government compliance regulations 
  • Developing new policies and codes of conduct that promote ethics within the workplace 
  • Meeting with management teams to discuss how they can implement ethics at work 
  • Conducting investigations into reports of unethical practices or situations 
  • Performing audits to gain more information about a company 
  • Creating procedures for responding to reports of unethical practices and workplace conflicts 
  • Keeping detailed records of their efforts to track progress and identify other areas for improvement 
  • Remaining updated on compliance and ethics topics, including government and corporate concepts 

While all of this is important, there are added dimensions that a true “Next-Gen” Chief Ethics Officer will bring to the table, as their work will require more in-depth cross-functional skills and training.  Specifically, the next generation of best-in-class Chief Ethics Officers should have capabilities beyond the traditional legal and compliance foundation of their role. These qualities include: 

  • Elevated business acumen: the ability to embrace disruption as a catalyst for profit growth.   
  • Intellectual curiosity about the rise and diffusion of major technological advancements: ideal for business-savvy scientists, technologists, futurists. 
  • Elevated lateral thinking: the ability to solve problems through an indirect and creative approach, using reasoning that is not immediately obvious, and involving ideas that may not be obtainable using traditional step-by-step logic. 

Based on preliminary research performed by myself and other members of Kingsley Gate Partners on this new “asset class” of talent, strong lateral thinkers are the proverbial unicorn—as most Chief Ethics Officer candidates tend to be rules-based practitioners. While that was sufficient in the past, the next iteration of the role will require the ability to think logically, ask philosophical questions, and reason and promote new ways of approaching complex issues.  

We view this as an important, mostly unmet need for business leaders, and one that will only become more critical as time goes on. We would welcome your insight on the challenges and opportunities associated with this topic, as well as any thoughts you may have about how our firm can help companies address them. 

Senior Partner and
Global Financial Officer Practice Leader
Associate