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Originally Posted On: https://christasteele.com/blog-1/f/the-metaverse-and-future-of-boardroom-oversight
I was an early advocate and educator of Blockchain back in 2015 before blockchain became known in most boardrooms. I find myself once again, intrigued but cautious, about the Metaverse.
The Metaverse is a 3D virtual place that combines the physical world with the digital world. It is a 3D environment that allows users to interact with each other and with objects in a virtual space. The concept of the metaverse was first imagined in the 1992 science fiction novel ‘Snow Crash”. Fast forward to today, Microsoft, Nvidia, Facebook’s Meta and other fast followers are rapidly creating applications to give businesses a gateway in to the metaverse.
What does this mean?
Nvidia’s CEP Jensen Huang explains it this way, “…the internet is essentially a digital overlay on the world. The overlay is largely 2D information — text voice, images, video — but that’s about to change. We now have the technology to create new 3D virtual worlds or model our physical world.”
Businesses will soon have three locations – physical, online and metaverse. Gartner predicts by 2026, 30% of organizations will have products and services ready for the metaverse.
The Metaverse is quickly evolving in areas such as:
– Online gaming platforms like Roblox
– Virtual reality for things like route optimization in warehouses
– Social networking
– Education and training
– Business meetings and conferences
– Marketing and advertising
“Today’s video conferencing, driven into the mainstream by the pandemic, is an example of two-dimensional collaboration. People can participate via their laptop cameras and microphones from home, or they can be in the office in a teleconference room. They can share their screens or use apps that allow for a collaborative whiteboard.
A metaverse layers immersive 3D on top of that. Participants can create avatars (digital representations of themselves) and use those to enter a virtual 3D room. In that room they can collaborate on a virtual whiteboard on the virtual wall or walk around a virtual 3D model of a car they are designing, for instance.” – Jessica Davis, Senior Editor of Information Week.
We’ve all become accustomed to video conferencing being pretty routine. However, there is much to dispute over how the metaverse data and security will ultimately be governed alongside other rapidly evolving areas in the world of IoT, AI, 3D printing, decentralized ledgers, cryptographically secured assets, smart contracts and the world of augmented reality.
Metaverse Governance is still to be determined but will likely evolve in one of three ways:
A Metaverse governed by a centralized authority. This could be a government body or a private company. The advantage of this approach is that it would provide a clear and concise set of rules and regulations that would need to be followed. However, the disadvantage is that it could stifle innovation and creativity.
A Metaverse governed by a decentralized group. This could be done through a platform like Ethereum (as a progressive example), which allows users to create and enforce their own rules. The advantage of this approach is that it would allow for more flexibility and creativity. However, the disadvantage is that it could lead to a more chaotic and anarchic environment.
A Metaverse that is self-governed. This would mean that there would be no central authority or group of people that would be in charge. Instead, the users of the Metaverse would need to come to a consensus on how it should be governed. The advantage of this approach is that it would allow for a more democratic and decentralized governance structure. However, the disadvantage is that it could take longer to reach a consensus on important decisions.
Though the Metaverse is in its infancy for discovering all of its possibilities, progressive boardrooms should begin a dialogue with management to understand the opportunities, but also how it will likely impact and reshape the business model from a risk perspective. No matter the outcome of who governs the Metaverse, there will be risks to business implementation.
“As technology continues to evolve, the metaverse will be built on a foundation of contracts that are more dynamic, intelligent, and connected, bridging the virtual and real worlds to make the metaverse more relevant. Risk management and security will emerge as top priorities for CXOs who will need to focus on identifying, managing, and mitigating risk across functions in their organization. It will be critical for CXOs and Boards to leverage contracts as enterprise vehicles to understand their legal, commercial, operational, reputational, geographical, and political risks in quasi real-time.” – Monish Darda, CTO.
Risks and implementation challenges to identify early on in your Metaverse journey should include (but not be limited to) understanding:
· Regulatory uncertainty
· Technological uncertainties
· Cyber-Security risks
· Oversight, Legal and Compliance challenges
· Talent gaps
· Reputational risks
Where to begin the Metaverse exploration:
When I think about the companies I’ve been fortunate enough to lead or their boardrooms in which I have been an independent director, I could see applying the metaverse in so many different ways. From visiting a virtual bank branch, route optimization for service based industries heavy in transportation and logistics, to virtual crop inspections in near real time, or using 3D imagery in drone surveillance.
Consider establishing a Metaverse “assess and learn” for your business. From here, think about how your business can use the Metaverse to enhance client and employee engagement. Understand and mitigate risks as they apply to your business model. Then determine how the Metaverse can be applied to your technology roadmap.
By understanding these technologies, risks and challenges, boardrooms can put in place the necessary safeguards to protect the business enterprise and its data as the metaverse becomes mainstream. With the right approach, the Metaverse will be a powerful engagement tool of the future.
About the author:
2x CEO | Technology CEO | Former Bank CEO | RMR Models | Finance & Governance Expert | 9x Public & Private Company Board Director
Christa Steele has led $500M – $1B organizations with proven success improving business results of under-performing teams. She brings extensive experience managing complex organizations and situations with the ability to develop long-term strategies focused on tactical execution.