Presenting quarterly to boards is a chore for CIOs, who typically spend the time discussing cybersecurity risks and operations matters. But with technology playing an outsized role in businesses, CIOs and board members should meet more frequently outside the boardroom to strategize for digital disruption, says Khalid Kark, managing director of Deloitte’s U.S. CIO practice.
“CIOs infrequently appear in the boardroom and when they do they often find it difficult to engage directors in a strategic dialogue,” says Kark, who interviewed 15 board members and a handful of CIOs on the topic.
Boardroom conversations around technology are too tilted toward defense and not enough around offense, with “protecting and preserving” the business prevailing over developing digital capabilities to drive new business models and revenue streams, Kark says. Forty-eight percent of board technology conversations center on cyber risk and privacy topics, while 32 percent are concerned with technology-enabled digital transformation, according to Deloitte research.
It’s perhaps no surprise that boards, many of which lack technical expertise, are often starved for information and understanding of how digital transformations work. Yet, anecdotal evidence suggests the more frequent the interactions between tech leaders and the board, the more likely they are to talk about strategic matters, such digital innovation and growth opportunities, Kark says.
What to do about this paradox? Engage in continuous conversations over lunch, coffee or cocktails, says Kark. And master the art of ongoing engagement.
Some CIOs are already breaking down complex technology issues for their board members in a buttoned-down fashion. But less formal conversations can boost the board’s technology literacy and your ability to set the tech agenda.
After Chris Bedi, CIO of enterprise SaaS provider ServiceNow, briefed his board on a tech matter, one member indicated he wanted more information on the topic. Bedi and the board member met outside the boardroom setting to get on the same page. “We talked about the need to calibrate the right altitude for the conversation,” Bedi recalls. “I appreciated the candor.” Bedi meets with that board member and others outside the boardroom at least three times a year.
Such connections are critical as they enable CIOs to shine when they engage the board in a more strategic conversation. A board member will listen more attentively to a CIO discussing how a tech initiative can drive business productivity or unlock innovation and growth than one listing cybersecurity threats or rattling off programs and projects, Bedi says.
“It’s a very different narrative than talking about implementations to secure funding,” Bedi says. Once CIOs begin to communicate this way with board members, they can tap into the board to get advice, similar to how CFOs do.
But communicating with the board is an art and steering clear of the tech jargon pitfall is key. CIOs must exercise caution in abstracting information to a level where all of the board can understand it, employing different levels of digital literacy to “keep the room,” Bedi says.
Meetings over lunch or coffee in a less boardroom-like environment has been critical for Alan Talbot, who as the CIO of Air Malta Talbot has a close relationship with the chairman of the board and other directors, with whom he meets outside the quarterly meetings.
CIOs gain credibility with their boards by conferring information regarding risk and operational resilience but presenting options and backing up claims with facts and figures is critical, Talbot says. “That level of transparency and frankness is important,” Talbot says. “That puts everyone on the same playing field.”
That transparency serves CIOs well as they discuss more strategic matters. But it can also present new communication challenges, as the IT leader must first ensure that their boards understand the changes in people, process and technology required for digital transformation and then deliver on what they’ve pledged.
Talbot, for example, is replacing Air Malta’s legacy systems with new software, built with APIs and microservices on MuleSoft. It is far more important that the board understands the business benefits of modernizing platforms than the technical details.
Boosting board relationships 101
It’s become fashionable for boards to install CIOs or other leaders with technical expertise, but board seats are scant due to long tenures, politics and other factors, Kark says. Less than 10 percent of S&P 500 companies had a technology subcommittee and less than 5 percent had appointed a technologist to newly opened board seats, Deloitte says. Moreover, not every CIO can serve on a board, particularly when they are already beholden to their own corporate boards.
That brings CIOs full-circle to the necessity of increasing the frequency of communication with their boards. “Having an ongoing dialogue is a really important aspect of helping boards understand the changing dynamic,” Kark says.
Deloitte offers the following advice to CIOs looking to boost their board relationships.
Apply the “zoom out, zoom in” approach. In a departure from the conventional strategic planning horizon of one to five years, the zoom out, zoom in approach targets 10 to 20 years (zoom out) and six to 12 months (zoom in). The zoom-out horizon includes trends likely to affect the business, allowing CIOs to engage board members on long-term opportunities and the future business trajectory. The zoom-in perspective focuses on business initiatives that could drive significant short-term business impact. CIOs and boards can collaborate on balancing business objectives and resources across both dimensions, Kark says.
Back your pitch with data. Echoing Talbot’s point, data packs quite the credibility punch. Include balanced scorecards and consistent operational metrics with established thresholds and risk markers to allow for more discussion time. Some board members suggest creating a slide, handout or chart to boil down a complex idea.
No risk, no reward. The rapidly changing technology and business landscape has whetted boards’ appetites for, or at least acceptance of, big tech bets for the future. CIOs should engage with the board to discuss potential large investments and their impact on the business.
Seek the board’s counsel on growth opportunities. Tap the board members, most of whom are current or former high-level executives who are comfortable with strategy conversations, for feedback and suggestions on how to shape the organization’s growth strategy.
Keep an open mind. Tech leaders and board members rarely have continuous conversations about key tech dimensions, metrics, or thresholds, let alone discuss the target allocation of technology investments. What better time to start than now? But these conversations should be inclusive of all viewpoints. “No one has a monopoly on good ideas, and board members have a lot of valuable expertise and insights they can bring to the mix,” one board member tells Deloitte.