Khwaja's Take on JP Morgan Chase, GM, Apple, Southwest, EU's CRA, Ethics, Compliance, and much more !!

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1. JPMorganChase Warns Customers: Prepare to Pay for Checking Accounts.

JPMorganChase Warns Customers: Prepare to Pay for Checking Accounts. As Open Banking advances, what are your thoughts on JPM's decision and its impact on the business and customers?

If you were a member of a bank's board, what strategic shifts would you consider to address cost pressures, improve efficiency, and adapt to evolving customer and regulatory demands?

??Assuming the bank has committee for innovation/technology and cybersecurity, what specific metrics would you prioritize for banking transformation?

??Some key considerations could include API-driven new revenues, growth strategies centered around new products integrated with embedded banking services, acceleration of cloud and AI technologies, and the democratization of low-code/no-code capabilities to infuse citizen-centered experiences.

??Additionally, achieving maturity in ecosystem development is crucial.

??It's also imperative to prioritize data privacy, security, and the integration of AI across all facets of the business. What are your thoughts on this?

2. EU’s Cyber Resilience Act (CRA) Takes Effect.

The clock is ticking. When the EU’s Cyber Resilience Act (CRA) takes effect, manufacturers of most digital products sold in the EU will need to meet a range of new cybersecurity requirements, including providing SBOMs to market surveillance authorities upon request.?

Do you think boards are prepared? Do they understand what SBOM means?

3. Saks Fifth Avenue is buying Neiman Marcus with Amazon’s help

The ever-changing economic landscape and consumer behaviour have a major impact on department store chains, and they warrant strategic pivots.

??Learn more from my LinkedIn piece (https://shorturl.at/WkkCj) on the importance of strategic pivots and power of ecosystem.

??Great move by Marc Metrick and the combined board. The companies will be stronger together than they have been apart.

4. India is on Track to be the World’s Largest Economy by 2028.

India is on track to be the world’s largest economy by 2028. Boards must be agile in their continuous learning.

??It is more important than ever to keep a vigilant eye on media reports and political discourse surrounding foreign trade relationships.

??A Semiconductor chip supply shortage can have a major impact on your business model. Remember 2021 Auto Industry Shock!!

??Without semiconductors there is no generative artificial intelligence (GenAI) models, the cloud, and intelligent devices.

? Ian Bremmer always has front-row observations on geopolitics that no board should ignore in this polycrisis era.

5. Board's?Oversight in Shaping the Company's Strategy including AI Strategy.

Long-term value creation is directly dependent on board?oversight in shaping the company's Strategy, and it includes AI Strategy. Check out the LinkedIn piece I wrote in 2020 here (https://shorturl.at/g28IQ).

??An effective board oversight enables optimal mix of simplification, responsible growth, digital transformation and digital optimization.

??Enlightened Board always ask senior management about all strategic options associated with AI (Closed LLMs vs Open Source LLMs, and much more) to spur the debate for effective decision-making.

??Having a digitally-savvy and Cyber-savvy Board Director can make all the difference in ensuring senior management invests in key capabilities and overseeing their maturity.

??Governance, organization model, AI literacy, engineering, data and technology are non-negotiable.What do you think?

6. LinkedIn News Features My Post On Southwest AIrlines

I am glad to see my point of view on Board Excellence and the importance of the Board’s technology oversight highlighted by LinkedIn News.

Subscribe to my LinkedIn newsletter here (https://bit.ly/3VCkqyV).

7. Southwest Airlines Adopts ‘Poison Pill’.

Southwest Airlines adopts ‘poison pill’ to fend off activist Elliott Investment Management L.P.

Similar to financial ratios, cash flow, EBITDA, etc., All Board Directors should be familiar with concepts such as Tech Debt.

Check out my LinkedIn piece (https://shorturl.at/FCBT0) on Tech Debt, Modernization, and proxy fights.

Poison pills are board-approved plans, often structured as bylaw amendments, that give existing shareholders rights that are intended to impede unsolicited changes of control (hostile takeovers).?

Boards must consider both positive and negative effects of ?Anti-Takeover Considerations. What do you think? What role does Tech plays in both short and long-term to prevent situations like these?

8. Meta Hit With EU Charges Over Targeted Advertising.

Facebook owner becomes second company to be charged under EU’s new digital-competition law. More here (https://shorturl.at/EfrV6).

Privacy?breaches are common as you scale AI. In the era of increasing?privacy?regulations, what is ONE thing you would like to add on your board agenda?

9. Jerome Powell and Christine Lagarde on Cyber Risk.

Jerome Powell and Christine Lagarde said Cyber Risk is the #1 Risk with Sara Eisen on CNBC.

I couldn't agree more with Elizabeth Skey and Bingxin Wu of Cooley LLP. Learn more here (https://shorturl.at/AoWj7). How are you strengthening Board's Cybersecurity Oversight?

10. Importance of Cyber-risk Quantification

Despite a growing body of data, cyber risk still isn’t well understood, insurers say.

Cyber-risk quantification (CRQ) and its oversight is another key element of the Board's Cybersecurity Oversight.

It is imperative to oversee both quantitative and qualitative scores to measure cyber-risk.If the boards are not tying cybersecurity to business risk, then you need a board refresh and the establishment of an innovation/technology and cybersecurity committee.

What do you think?

11. Boeing to Buy Spirit AeroSystems for $4.7 billion.

Boeing to buy Spirit AeroSystems for $4.7 billion. What advice would you offer if you meet the lead director of Boeing on an elevator to make this Aquisition a huge success.

Here is the advice I offer for the firms looking for profitable growth through M&A.

What do you think?

? Identify & invest in disruptive technologies to gain a competitive advantage through innovation & technology committees.

??Have the acquired firm’s best of the best talent drive the competitive advantage. Link AI, Cloud “and” ESG to overall strategy discussions.

? Bring opposing viewpoints or stage a bake-off between teams for and against it underpinned by a noble purpose.

? Ensures Capital structure, ESG metrics, innovation metrics, cybersecurity metrics are part of M&A due diligence.

? Understanding customers, markets, and data privacy, regulatory and compliance are vital for flawless execution.

? Oversee M&A through capital structure, operational capacity, optimal mix of simplification, growth, and digital optimization.

? Ensure a diverse board through Board Refresh and hold management accountable to capture synergies of M&A.

? Oversee management for a strong emphasis on culture. Track Progress and Conduct Post-mortems.

? Consider the needs of all stakehoders for the long view.

12. Autonomy Revolution and Board's Engagement

Enlightened Boards have capable board composition due to forward-thinking lead Directors, Nomination and Governance Chairs. They engage with the General Counsel to future-proof board composition.

Do you think current boards have digital/technology and cybersecurity expertise to engage and oversee this autonomy revolution where attack surface is increasing exponentially?

13. Salesforce’s Marc Benioff on Microsoft's Security Practices

Salesforce’s Marc Benioff spoke about Microsoft's security practices at CNBC this evening. As I mentioned in my LinkedIn newsletter, after reviewing the proxy report, few adds:

? The Microsoft Board should spend more time overseeing and tracking the overall business commitment to cybersecurity.

??The board committee charter lacks robustness in terms of cybersecurity system governance, including measures related to data protection.

??I suggest a dedicated technology and cybersecurity committee. Currently, only specific aspects of cybersecurity are discussed under the "Environmental, Social, and Public Policy" Committee Charter. There is a lack of a reasonable oversight system, including systemic cyber risk.

??There is a lack of deep cybersecurity expertise and a governance system in the boardroom. There is no specific mention of cybersecurity expertise in the board's governance best practices.

? I like Satya Nadella’s higher purpose statement -We, as a company, will do well when the world around us does well.

14. Culture Drives Strategy.

Make sure your top people are leading by example. If you want your culture to take root, leadership must be the first to model it.

I couldn't agree more with Erin Meyer. Checkout his HBR piece here (https://shorturl.at/fFWWx). Make Sure that Culture Drives Strategy.

15. Board's effective AI Oversight in Business Transformation

Board's Effective AI oversight will define the success of digital and AI-led business transformation for the new tomorrow. Board Chairs, Lead Directors, Board Directors, are you ready to engage and oversee the C-Suite?

Boards must treat AI as strategic and integrate it with business strategies. This is a team sport – Chief Risk Officers, CISOs and Chief Privacy Officers should have a seat at the table to manage privacy and security imperatives around transparency and Zero Trust Architecture.

Learn more here from my LinkedIn piece (https://shorturl.at/gbiyK) .Key Focus Areas:

??Oversee Quantitative Metrics for security and business outcomes

??Engage and Oversee Capital Allocation Decisions to avoid long-term value erosion

??Oversee Qualitative Metrics associated with Open Innovation, Developer & Employee Experience through AI-led initiatives

??Engage and Oversee Quantitative Metrics associated with New Revenues from product-led growth and customer experience infused Earnings Growth Rate Value Plays

??Engage and Oversee Control Effectiveness, data resilience, and AI Ethics Maturity Models.

Per The Wall Street Journal, Goldman Sachs will roll out its first generative AI tool for code generation to thousands of developers by the end of the month. Marco Argenti has a great start here from the CIO lens.

?? What metrics are you tracking to ensure AI success in your organization?

16. Nike's Strategic Pivot

In today's rapidly evolving business landscape, where generative AI, digitization, and sustainability are just a few of the heavyweight disruptors, the role of a board director has never been more demanding.

The rising complexity of board directorship calls for more than stewardship; it demands strategic agility and foresight. The expectation isn't just to govern but to engage deeply with strategy, performance, risk, and talent to pioneer transformative change.

Do you think Nike needs a strategic pivot. What advice would you offer if you meet Nike Lead Director on a elevator.

17. Importance of Digitally-savvy and Cyber-savvy Board Directors.

An enlightened Board that includes digitally-savvy and cyber-savvy board directors makes all the difference in overseeing senior management to shape digital innovation and drive competitive advantage. I have seen a few boards that are good at shaping strategy while failing to seek metrics on capabilities and frameworks needed to win. Open Source Innovation when it comes to AI for value creation is huge!!

What do you think?

18. KPMG Survey on Board's Agenda

According to the KPMG survey, Cyber, AI, and Risk disclosures are the top issues on the Board's agenda today. I couldn't agree more.

Great work by Stephen Brown, Pamela Marcogliese, and Elizabeth K. Bieber. Learn more here from my LinkedIn piece (https://shorturl.at/Kdiby).

Real-time cyber disclosures are on the rise through 8-Ks.Does the Board need a separate committee for AI oversight?

It depends on the industry, bandwidth issue, and the full Board must be engaged for major decisions.

What do you think?

Reflection Quote -on the agenda and committee ownership of issues before you comment: “The real issue is how, what, where, when and why it affects the actual value proposition of the enterprise being governed”. -Nicholas Donofrio

19. Oversight of Ethics and Compliance

Oversight of ethics and compliance programs is a core board responsibility—and it includes Board Director misconduct. Recent revelations about Bed Bath & Beyond board members allegedly leaking info to Ryan Cohen before his $60M gain highlight the need for robust boardroom ethics and boardroom culture.

Director misconduct can take many forms:

? Unauthorized disclosure of confidential info

? Unapproved representation of the board/company

? Competing businesses

? Undisclosed conflicts of interest

? Ignoring board seat limits

? Unauthorized trading of company securities

? Undue operational interference

? Legal violationsI counsel Board Chairs and lead directors to lead with a higher purpose and be self-reflective in taking ownership of their values, beliefs, behaviors, and norms.

Learn more here (https://lnkd.in/eN22cyqW) from NACD (National Association of Corporate Directors)'s take on optimum board culture.

How are you upholding ethical standards and compliance practices? What steps is your board taking to strengthen its ethics?

20. Board's Understanding of Cyber Incidents and Materiality is Paramount

Shareholders are suing Board Directors and Executive Officers following major breaches. Board Directors must familiarize themselves with terms such as "material incident."

Learn more here from my LinkedIn piece (https://lnkd.in/eQ54THXV), as cybersecurity oversight is a team sport.

? Per the SEC, misconfigurations are also counted as cyber incidents.

? Antony ("Tony") P. Kim of Latham & Watkins LLP had great insights here that I couldn't agree more!!

? Qualitative aspects are also material impacts—disclosable. Materiality determination is crucial.

? Communications and specific words used (may, potential, we believe etc.) also matters for disclosures.

21. Board's Role on CEO Transitions

Is your Board looking to hire the next CEO? Are you a designated successor?

The authors including the legend Adam Bryant have captured the gist superbly and it aligns with my observations and my board experience as well.

When a CEO transition fails, it often comes down to mishandled power dynamics. Key players—the board, the outgoing CEO, and the incoming leader—frequently have different agendas.

The latest 美国哈佛商学院 article offers practical advice on mastering this complex process. Most boards wait too long to get serious about succession.

The actions of the incoming CEO have the biggest impact on whether the handoff succeeds or falls.

The successor must use power and influence skillfully. Future leaders must skillfully influence key stakeholders through:

? Assertive persuasion

? Incentives and disincentives

? Common vision

? Openness and involvement

Once in charge, focusing on winning board support and articulating a clear vision is crucial. What strategies have you found effective in smooth leadership transitions?

22. The European Union Regulators Accuse Apple

Per CNBC (https://lnkd.in/ek-qypy7), The European Union regulators accuse Apple of breaching the bloc’s tech rules. Fortune's AI newsletter indicates?generative AI startup's adoptions of the “move fast and break sh-t” mindset and how this may come back to haunt them—and us.

Do you think Corporate Boards have AI and compliance expertise to handle situations like these?

23. General Motors's Board Governance Practices.

I was watching the fabulous Emily Chang’s The Circuit (The Circuit: trib.al/KiLwj5q) and got curious about General Motors's board governance practices.

? GM has combined Risk and Cyber under one committee, and technology is being discussed in silos when it is foundational and strategic. What do you think?

? Establish a dedicated technology/innovation and cybersecurity committee within the board structure. Learn more here on my take from my LinkedIn piece(https://lnkd.in/et4ucAyv).

? I give Mary Barra and the lead Director on the board diversity and skills matrix high marks (A, not A+). I give an A+ for integrating sustainability across all board committees.

? I love Mary Barra's quote, which includes the importance of technology “and” talent."We have the ambition, the talent, and the technology to create a world with zero crashes, zero emissions, and zero congestion."Mary Barra // Chair and CEO

Reflection Quote -on the agenda and committee ownership of issues before you comment:“The real issue is how, what, where, when and why it affects the actual value proposition of the enterprise being governed”. -Nicholas Donofrio

24. Board's Role in Shaping AI Strategy

In 2021, I wrote a LinkedIn piece (https://lnkd.in/grEMdtJ8) on how capable boards co-create and shape the strategy.

?? What other board questions would you like to add to this list in shaping AI strategy?

??Do you think GPUs are the optimal solution for inference tasks?

??How are you shaping AI strategy in the context of geopolitical risks (and export controls)?

??Is your AI stack providing differentiation and competitive advantage?

??Is your CIO just focusing on transformer models during capital allocation discussions with your board?

??Does your Board has innovation/technology and cybersecurity committee to engage and make senior management accountable for avoiding concentration risks and driving value plays around customer flexibility and market demand?

25. Increasing Earnings Growth Rate Strategies

How do you increase earnings growth rate? Check out pearls of wisdom from Nicholas Donofrio :

? Embrace a market-centric mindset.

? Always make yourself available whether it was a client team or an individual.

? Always be on the lookout for FOAK -First of a Kind.

26. HOW CAPABLE BOARDS OVERSEE INNOVATION

“Silicon Valley simply has the highest level ecosystem under any measure—venture capital, patenting and startup formation,” says Jorge Guzman. HOW CAPABLE BOARDS OVERSEE INNOVATION?

? Industrialize innovation practices, Tech debt reduction practices, ethical practices, tech radar practices, Feasibility practices, cost models to scale value propositions and platform business models.

? Human Capital and Compensation Committee must seek metrics on skills competencies including business acumen, strategy consulting, EQ, Growth mindset, and Agility.

? Infusing solution mindset, portfolio prioritization, Guradrails, overseeing the shift from minimum viable products (MVPs) to minimum marketable products (MMPs) are Board Agenda Items.

? Refresh the board with “T” shaped skills -tech, security, privacy, and digitally savvy skills. Industry adjacencies and shaping strategy matters.

? Ensure your board oversight includes metrics on talent diversity and repeatability in the democratization of the innovation portfolio.

? Winning in the short term “and” the long term requires both incremental innovation "and" radical innovation tied to strategy.

? Co-create with external partners and Venture Capital ecosystems to unlock future value through innovation and user adoption.

? Do or Die. Infuse innovation as a competiive adwantage and profitable growth mantra.

27. Why Digital Sustainability Matters

I wrote a 2021 LinkedIn piece (https://lnkd.in/eKQf3Whw) on digital sustainability and the power of data fabric from board oversight standpoint.

Norita Ahmad and Salwa Beheiry succinctly capture the gist in their IEEE Xplore computing edge piece here (https://lnkd.in/eJFMrv5z).

What do you think?

Data, when harnessed effectively, has the power to drive positive change across various sectors, from agriculture and energy to transportation and urban planning. It is a potent tool for addressing global challenges.

28. Will Debt Sink the American Empire?

Will Debt Sink the American Empire? What do you think?“Any great power that spends more on debt service (interest payments on the national debt) than on defense will not stay great for very long". -Niall FergusonMore here (https://lnkd.in/epFSj7Yc).

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For professional insights into complex issues, join the?conversation by tweeting Khwaja at @Khwaja_Shaik or?connecting with him on LinkedIn.

ABOUT KHWAJA SHAIK

Khwaja Shaik, a digital expert and cyber-savvy board director, brings over 25 years of global experience in technology, cybersecurity, sustainability, nimble innovation, and fintech. He is a sought-after advisor for CEOs and boards globally, providing invaluable insights at the nexus of technology, cybersecurity, and financial services. Khwaja drives profitable growth through innovation, digital acceleration, and risk management. With a career spanning renowned companies like IBM, Bank of America Merrill Lynch, Al Rostamani Group, and PwC, he is internationally acknowledged as an authority in corporate governance, technology governance, VC/startup incubation, and digital resilience.

Khwaja advises CEOs, Boards, and Startups on carving out Future-Fit Tech strategies aligned with board priorities. But beyond his illustrious career, Khwaja's true calling lies in altruism. He staunchly believes in weaving noble purpose into business strategies, championing a model of multi-stakeholder capitalism. Committed to societal transformation, he strives to leave a profound impact through socially responsible, ethical technology, and privacy-centric practices.

Khwaja is a visionary leader with a proven track record of success in transforming businesses through innovation and digital. He has an innate understanding of how to harness technology to create better customer experiences and future-proof operations.

At Bank of America, he managed risk and infused Fintech and Cloud best practices into the firm’s strategy, saving the company $1.1 billion per year during the 2008 financial crisis. At PwC, he incubated new businesses to grow revenue across multiple economic cycles, reshaping industry and platform operating models— digitizing end-to-end business processes to capture value, and protecting firms from cyberattacks through digital resilience.

Khwaja has a history of leading over $10B in digital business transformations by scaling Agile practices for cost optimization, revenue-generation, and societal transformation imperatives. It includes strategic oversight, risk mitigation, business optimization, digital business models to capture profitable growth, customer lifetime value & competitive advantage to Fortune 500 firms.

Khwaja delivered a modern banking platform and transformed the Omnichannel customer experience through world's largest Contact Center platform, serving 1 billion calls, as part of BofA's M&A (CFC, MBNA, Fleet, etc.) to support the AI-led growth strategy.

Khwaja is one of the most exceptional IBMers appointed, with the rare distinction of IBM Academy of Technology member. Holds many patents serves on IBM’s Invention Board. Khwaja is one of the top 100 leaders elevating corporate purpose, driving AI ethics, privacy, data stewardship, regulatory/compliance and sustainability. He provides the direction of IBM's long-term strategy through ESG and good tech.

Khwaja serves on the Museum of Science & History and University of North Florida boards to promote economic equity, social, diversity, and inclusion for the prosperity of all. He teaches emerging tech, systemic risks, cybersecurity, AI ethics, and privacy-by-design efforts at University of North Florida and Competent Boards.

Khwaja is a frequent speaker on Board Practices, Technology, and Cybersecurity at NACD (National Association of Corporate Directors), Competent Boards, New York University School of Law, American College of Corporate Directors, Boardswell etc.

Khwaja is a Fellow of The Herndon Foundation Board Institute, sponsored by Nasdaq & Atlanta Life. Khwaja is proud to be part of both Ascend Leadership's Pinnacle Aspiring Directors Academy and University of North Carolina at Chapel Hill School of Law's 2023 DDI Board Boot Camp. Khwaja holds an MBA and an Engineering degree. Khwaja lived in India, Middle East, experienced three different cultures, reads too much, doesn’t do enough gardening, married for over 24 years with two remarkable boys.

More details on Khwaja’s career and thought leadership activities could be found via Linkedin, Khwajashaik.com or follow him on Twitter @Khwaja_Shaik

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