As organizations pioneer new ways of working in the metaverse, billed as the next stage of the internet, boards must weigh the potential value that could be realized from adoption of the metaverse with the inherent risks implementing its embedded technologies.
The metaverse leverages a variety of technical advances — such as extended reality and AI — fostering new digital capabilities and experiences that have the potential to deliver lasting change. Many companies are considering how to enable trust in the metaverse, recognizing that its adoption holds the prospect of altering how organizations function, whether that entails product sales and new storefronts, virtual health care sites or commerce sites, new employee orientations, internal global meetings and education, entertainment, and so much more. It has been described as the internet in 3D.
Why the Metaverse Matters to Directors
As organizations begin to build, participate and transact in the metaverse, boards will be tasked with understanding the strategic opportunities and risks associated with it. They will play an important role in influencing metaverse investment decisions and, increasingly, helping organizations evaluate the ethical, commercial and legal risks associated with emerging technologies.
To do so, boards must understand what the metaverse is, the risks associated with it broadly and the underlying technologies. The metaverse is accessed through multiple technologies, including laptops and smartphones, so cyber risks are also heightened.
Virtual reality, augmented reality and mixed reality augment metaverse experiences, extending or enhancing perceptions of reality to create captivating, lifelike user experiences that are tricky to govern. Imagine transacting business in a virtual bank with an avatar in the metaverse, using a smartphone app that takes the mortgage loan shopper on a virtual trip with the banker to inspect the house and to shop for the best mortgage interest rates. Or consider a music student looking to buy virtual lessons with a celebrity rock guitarist who enters the studio full of non-fungible tokens (NFTs) for sale on the walls, which they can buy while waiting for the music consultation to begin. The examples are endless, as are the risks that boards must ponder.
The potential for value creation in the metaverse is phenomenal.
Kris Pederson is leader of the EY Americas Center for Board Matters.
