Done right, it would give businesses a competitive advantage. Done wrong, and it would mean a huge competitive disadvantage and the likelihood of going out of business.
Harnessing AI was among the list of significant issues facing directors which Mr Buckley — the chairman of the board of the Institute of Directors — outlined during a visit to Dunedin this week.
Mr Buckley (62) began his professional governance career in 2020 after retiring from KPMG NZ, where he was executive chairman from 2011 to 2020.
Among his governance roles, he is an independent board director of ASB Bank.
Discussing AI, he said it was very important that directors and companies had policies around it.
The Commonwealth Bank of Australia (CBA) was already using AI for fraud detection, to help people budget and forecast and to process mortgage approvals a lot quicker — some in as little as 10 minutes.
Climate leadership was "a big one". The "easy bits" had been done and the hard part of reducing gross emissions and getting the intensity of emissions down started now.
He welcomed Fonterra’s announcement of an on-farm emissions reduction target.
The co-operative is targeting a 30% intensity reduction in on-farm emissions by 2030, from a 2018 baseline.
Behind the farm gate was the "elephant in the room" for New Zealand, he said.
For Fonterra to exhibit such leadership was really good.
When it came to climate change, businesses could not just green- or bluewash.
"It’s just good business common sense. If you don’t do the right thing, people won’t buy from you. Consumers are going to demand they do the right thing," he said.
Financial sustainability was very important as the country was going through tough economic times.
While a lot of people reckoned New Zealand had "lost its mojo", he believed the country was better placed than many.
Considering the higher debt, high interest rates, cost of living crisis and the fact inflation and export commodities were down, good financial management was needed and businesses should forecast ahead two to five years.
Already rising mortgage arrears were being seen, along with business collapses.
Having a good relationship with bankers was important and those discussions should be held "ahead of time, not afterwards", he said.
When it came to the social part of environmental, social and governance (ESG) — the framework used to assess an organisation’s business practices and performance on various sustainability and ethical issues — it was about social licence to operate and what a business was doing in the community and with its people.
A sense of belonging needed to be created and there needed to be a lot more flexibility. Hybrid working had to be tailored to the individual but, at the same time, employees needed to be in the office at least three days a week to keep that corporate culture going.
Operating in the best interests of the company was without doubt not just about maximising profit; it was about doing the right thing for people, Mr Buckley said.
Cyber-security was "never ending" and the cost of fraud and scams cost banks $20million last year.
"I say we’ve built higher walls to keep criminals out and they are building bigger ladders to get in."
The consequences were recently seen in Australia, where the chief executive of Optus resigned after a nationwide outage.
It was just like any other risk but the consequences could bring down a business.
While it might sound simplistic, the key was ensuring cyber training was done, being more alert to phishing attacks and staying on top of it, he said.
When it came to board culture, Mr Buckley encouraged directors to make sure they chose organisations and companies they were passionate about and believed they could make a difference at.
Part of that was doing due diligence and making sure the culture was right, to ensure the experience was rewarding and satisfying.
It was very important those joining the board of an organisation added value to it. At the beginning, that might be around learning, followed by questioning and verifying information and then it was the third level where a director could add value, the top one being a thought leader. It was important when executives left the boardroom that they felt inspired and motivated.
When it came to leadership development, many people had worked very hard over the past three to four years and a watch needed to be kept for signs of burnout.
Retention of key people was important and the solution was not necessarily one-size-fits-all.
Boards had to focus on ensuring there was good succession planning and what skills would be needed going forward, and that also applied to executive leadership teams.
Digital transformation was also important. Many businesses had too many manual processes and businesses needed to always stay ahead of the game and look at how going digital could solve some of their problems.
Two of Mr Buckley’s roles were voluntary, part of his desire to give back.
One was at the Institute of Directors, a role he enjoyed as good governance was crucial, he said.
Strong governance led to successful companies, which ultimately led to strong communities.
Education was another passion, something he believed was the solution to poverty and inequities in society, and his role at Massey University on the University Council was very rewarding.
