No AI, No Alibi: The Case for Generative AI as the New Standard in Executive Due Diligence

Introduction

Today’s CEOs don’t just steer the ship; they navigate through complexities that demand clear insight, a solid grasp of context, and, most importantly, trust in the options presented. Yet, relying solely on options generated by advisors, underlings, or even the best-intentioned colleagues is risky. When others frame decisions, how can a CEO be sure these options are thorough, unbiased, or even truly strategic? Generative AI offers a glimpse into the future—a sophisticated, unprejudiced co-thinker that may soon become the standard for decision-making due diligence. It’s a digital partner that frames decisions, questions assumptions, and poses tough questions without bias.

Yogi Berra put it best: “In theory, there’s no difference between theory and practice. In practice, there is.” For CEOs, Generative AI could one day bridge that gap by providing grounded, context-rich insights that hold up in the real world, irrespective of internal politics or personal agendas.

With Generative AI, CEOs would have the power to evaluate each option independently. AI could cross-check suggestions against a comprehensive foundation of historical data, company reports past decisions, and industry insights. Imagine a future where AI not only frames potential decisions but also acts as a devil’s advocate, asking, “What’s missing?” and “Who benefits?” to ensure every angle has been considered. This tool could help communicate decisions effectively to the broader organization while driving unified messaging for alignment.

In this imagined future, Generative AI wouldn’t just be a useful tool—it could become an expectation in corporate governance. CEOs would be seen as having a duty to leverage AI as part of their due diligence process. However, to realize this future, generic AI models wouldn’t be enough; CEOs would need custom Foundation Models trained on the company’s unique data—its history, performance reports, internal analyses, and strategic initiatives. Only then could Generative AI truly serve as an effective co-thinking partner for executives.

Section 1: Moving Beyond the Agenda-Driven Decision Trap

Generative AI’s most valuable potential lies in freeing CEOs from the “agenda trap”—that is, the tendency for advisors and underlings to present options that align with their own goals, interests, or perspectives. Whether intentional or subconscious, these biases can skew decision-making, limiting what leaders see as feasible options. A well-intentioned manager might push a solution that aligns with their department's metrics, while an ambitious advisor might prioritize projects that enhance their visibility.

Generative AI would neutralize this risk by offering an objective perspective built not on individual ambition but on data-driven insight and the company’s historical learnings. Imagine a CEO considering a major product pivot. The AI could pull relevant insights from past projects and comparable industry moves, examining the decision’s alignment with broader company goals. It becomes a second set of eyes that cross-references each option, asking questions like:

- "Is this option truly strategic, or just an easy win for a specific department?"

- "Does this align with our long-term trajectory?"

- "Are there alternative routes that haven’t been considered yet?"

Gen AI could help CEOs push back on superficial or self-serving suggestions, Generative AI would support the CEO’s quest for well-rounded, comprehensive choices.

Example: Let’s say a CEO is considering a restructuring. The CEO's advisors propose three options, each heavily influenced by the proponents' department. Finance suggests the least cost option, whereas HR advocates for talent retention, and Operations pushes for process streamlining. Generative AI could cut through this noise by analyzing the potential long-term impact of each recommendation on productivity, morale, and customer satisfaction. The GenAI could even suggest blended options that incorporate the best from each, ensuring that decisions are not just politically balanced, and strategically sound.

Section 2: Generative AI as the CEO’s Independent Option Generator

A fundamental problem with relying on human advisors is that it limits the scope of available options. Generative AI, on the other hand, could broaden the decision landscape by generating additional options based on unbiased data analysis and industry patterns. This goes far beyond the typical “here’s what we should do” memo; it invites CEOs to consider the full spectrum of strategic avenues.

For example, if a CEO is considering an international expansion, Generative AI could evaluate the obvious markets, plus any emerging markets that advisors might overlook. It could weigh factors like historical performance, market dynamics, and regulatory climates to propose a range of scenarios. Importantly, it’s not influenced by what’s easiest, safest, or most beneficial to any department over others. AI-generated options could range from conservative to bold, helping CEOs explore strategic moves without the usual limitations of bias or tunnel vision.

How Generative AI Would Support Option Generation:

- Broadening the Decision Space: Bringing forth overlooked or unconventional options grounded in data, not departmental interest.

- Independent Scenario Analysis: Evaluating each potential move without the risk of personal bias or hidden motives.

- Revealing Blind Spots: Highlighting options that may otherwise fall outside the “usual suspects” list of choices.

Generative AI could give CEOs confidence that any option they are considering is complete, well-thought-out, and unclouded by any internal agenda.

Example: Consider a CEO looking to diversify the company’s portfolio. Traditional advisories may lean on established products or verticals, but GenAI could offer expanded possibilities, such as high-growth, high-impact niches or emerging markets. Gen AI may surface case studies involving high-value partnerships, and provide neutral risk assessments overlooked by departments with a single focus.

Section 3: Using AI to Vet and Critique Recommendations

Once options are generated, the next step is to evaluate them—a task that Generative AI could excel at in the future. Too often, recommendations reach the executive level without sufficient vetting, leaving CEOs to wonder, “How thoroughly was this thought through?” With Generative AI as a co-thinker, CEOs could receive a critical evaluation of each recommendation, identifying gaps, assumptions, and weaknesses that might otherwise go unnoticed.

Imagine a CEO presented with a proposal to streamline operations by outsourcing a significant portion of manufacturing. Generative AI could review past outsourcing cases, within the company and sector, and generate a list of potential risks, ranging from quality control issues to supply chain disruptions. It could also question assumptions like expected cost savings and projected timelines, providing an independent critique that challenges the proposal’s robustness.

Generative AI’s Role in Vetting Recommendations:

- Spotting Assumptions: Identifying untested assumptions and providing data-backed pushback.

- Highlighting Consequences: Surfacing potential downsides based on historical examples and industry insights.

- Providing Devil’s Advocate Scenarios: Offering alternative perspectives and “what if” scenarios that force a thorough evaluation.

Generative AI, as an unbiased co-thinker, could act as a devil’s advocate without personal stakes, allowing CEOs to approach each recommendation with confidence that it’s been vetted from all angles.

Example: Imagine a board presentation proposing an acquisition of a mid-sized tech firm. Generative AI can be leveraged to analyze acquisitions, identify synergies, and raise critical questions about cultural fit, integration speed, and potential regulatory hurdles — all elements that might be glossed over by eager advisors. By offering these challenges upfront, AI ensures that each recommendation is rigorously vetted before reaching the boardroom.

Section 4: Communicating Decisions with Credibility and Clarity

Once a decision is made, the challenge becomes communicating it effectively. Gen AI could help CEOs frame their decisions internally and then sell them in a way that resonates with various stakeholder groups. This framing would be extremely valuable for ensuring that all complex, high-stakes decisions gain full support across the firm.

Imagine that Gen AI has helped the CEO decide to pivot the company’s product strategy. Now, it’s time to roll it out. Generative AI, drawing on company culture data and historical internal communications, could recommend the most effective ways to communicate this shift. For managers, the AI might suggest a slide deck detailing the strategic shift and bottom-line impact. For frontline employees, a Q&A-style message might be drafted addressing potential concerns, such as role impact and training.

How Generative AI Could Aid in Communication:

- Framing Messages: Tailoring communication for different audiences, addressing diverse viewpoints.

- Anticipating Reactions: Forecasting likely points of resistance and preparing responses.

- Creating Alignment: Building understanding and support for the decision across all levels of the organization.

Through these AI-driven insights, CEOs could communicate with clarity, coherence, and confidence, ensuring that strategic decisions are backed by broad organizational support.

Example: A CEO deciding to enter a new market could use AI to create a range of communications for different stakeholders: for investors, a data-backed ROI projection; for employees, reassurance and growth incentives; for customers, a brand message about this expansion enhancing their product experience. Gen AI can ensure that the CEO’s message is cohesive, relevant, and well-supported at every level.

Section 5: Imagining Regulatory Expectations for AI-Driven Due Diligence

As we look to the future, it’s conceivable that regulators will expect leaders to use Generative AI as part of their due diligence supporting decisions. A CEO who overlooks Generative AI’s analytical capabilities may one day be seen as cutting corners, especially in high-stakes or compliance-sensitive decisions.

Generative AI could record and document the entire decision-making process, from initial considerations to final recommendations, providing a clear audit trail that evidences diligence and transparency. This record would satisfy regulatory expectations and serve as a robust defense against potential criticism or legal scrutiny.

How Generative AI Would Strengthen Due Diligence:

- Documenting the Decision Path: Keeping a comprehensive log of considerations, assumptions, and final decisions.

- Providing a Compliance Check: Ensuring all regulatory requirements and risk assessments are met.

- Building a Defense: Offering a robust record that shows every avenue was explored and considered.

By incorporating AI into their decision-making, CEOs could demonstrate accountability to regulators, shareholders, and the board, reinforcing their commitment to informed, responsible leadership.

Conclusion: Custom Foundation Models as the Key to Future Co-Thinking

For Generative AI to be an effective co-thinker in this imagined future, companies need custom Foundation Models tailored to their operations, history, and strategic goals. Generic AI models wouldn’t capture the nuances of a company’s culture, historical performance, or regulatory environment. By integrating custom data sources—from company reports to industry benchmarks—these models create an AI that understands the company as deeply as any executive.

With such a model, Generative AI could provide recommendations, critiques, and scenarios rooted in the company’s specific context, delivering insights that are at once both actionable and relevant. This would enable CEOs to make decisions that align with the company’s mission, history, and long-term goals while meeting the growing demands of regulatory due diligence.

In this forward-looking scenario, Generative AI isn’t just a luxury; it’s an ally that could define the future of prudent, accountable decision-making.