Board-level tech awareness
In response to the challenge posed by digitally enabled upstarts as well as the the opportunities inherent in digital business, a wider swathe of industries and business than ever before are aiming to prove that, ultimately ‘…every company is a technology company[i].’
The disconnect between corporate ambition and ability in using these technologies, and the need to remodel corporate architecture to maximise the potential of such technologies receives much attention, and rightly so. However, a greater issue – and one generally receiving less attention is the issue of board level technological competency.
Technology and its role in digital transformation compels board level expertise, and the issue ostensibly resonates. Research suggests that almost two-thirds of boards prioritising widening the skillset of board members, especially in digital. However, a number of worrying statistics suggest that efforts to date are insufficient. Digital efforts have tended to lack strategic alignment since 29% are still led by individual business units[ii]. Worse still, 69% have not discussed cybersecurity at board level in the preceding six months[iii] and 46% have made no efforts to educate their directors[iv], whose average age is 63. Overall, only 14% claim their boards have produced a comprehensive digital strategy[v]. With risks inherent in digital and the rewards far from assured by employing an operational plug and play tech strategy, such a set-up could well account for the predictions of an increased future turnover of the Fortune 500 and of corporate failure.
A shift in board education, competencies and even composition may be necessary if a clear, cohesive and strategic view of technology is to be achieved. This means adding directors with technical knowledge and a concurrent strategy to build IT awareness amongst existing members. The latter will require significant investment of time and money, at least initially as the board grapples with core issues:
- How does our tech infrastructure and specifics compare to peers, within and outside of the industry?
- To what extent does legacy technology impinge us? What investment is needed?
- How and where does our digital strategy match our overall strategic priorities?
- What capabilities do we need to achieve our strategies? Does our operational structure maximise technological ability?
One established an oversight position can be better established and should be aided by a new emphasis on lucid and open contact with the (right) CIO, as well as an outside-in perspective by subject-matter experts when needed. Periodic review, educational boot camps could also help inspire not only competence but perhaps the longer-term goal of the board providing tech education to the workforce. The challenges and opportunities presented by a digital world are both imminent and immense; can analogue boards change in time?