Talking tech in corporate boards

As technology becomes ubiquitous and digital transformations reinvent corporations and upend existing business models, corporate board members may be required to be technology fluent to navigate their organizations through these uncharted waters. 

Jon Valk

The spectrum of technology fluency ranges from having a basic understanding of technology, including differentiating between tech “myth” and fact and understanding how technology drives that individual business, to having a working knowledge of how technology capabilities and their adjacencies can drive new revenue and open fresh opportunities in the near term. 

While the percentage of public companies that have appointed technology-focused board members has grown over the last six years from 10 percent to 17 percent, Deloitte’s latest research suggests that boards have a long way to go.

Here are five ways boards can be more technology fluent.

As technology becomes ubiquitous and digital transformations reinvent corporations and upend existing business models, corporate board members may be required to be technology fluent to navigate their organizations through these uncharted waters. 

Jon Valk

The spectrum of technology fluency ranges from having a basic understanding of technology, including differentiating between tech “myth” and fact and understanding how technology drives that individual business, to having a working knowledge of how technology capabilities and their adjacencies can drive new revenue and open fresh opportunities in the near term. 

While the percentage of public companies that have appointed technology-focused board members has grown over the last six years from 10 percent to 17 percent, Deloitte’s latest research suggests that boards have a long way to go.

Here are five ways boards can be more technology fluent.

• Add tech fluency as a core competency for board seats. In 2016, 44 percent of boards identified technology experience as being on their wish list but only 3 percent of the companies hired a technologist. It’s about time boards include tech fluency as a core competency for a board position. Even a single board member with the requisite skills can be the conduit for other members to be more tech fluent. 
• Help define an offensive technology agenda. If you are not disrupting your marketplace, your competition likely will. Many corporate leaders are realizing that technology has the potential to catapult or quickly disrupt business models.  Many are developing bold technology agendas not just to drive efficiency or security but to generate direct shareholder value. 
• Consider a technology committee. Only 9 percent of corporate boards have a technology sub-committee today, but the number is increasing. This sub-committee can serve as the primary link between the board and the growing number of C-suite executives responsible for various aspects of technology (for example, the CIO, CTO, CISO, chief digital officer, chief data officer and chief marketing technology officer) and can help develop and endorse an overarching technology strategy. 
• Engage with technology leaders for continuous learning. Probing technology leaders for shifts and trends in technologies — especially those directly impacting or adjacent to their business — can allow board members to keep up to speed. This may mean that in addition to deliberating numbers and spreadsheets, board conversations will also need to focus on understanding the underlying technologies and their future trajectories. 
• Get involved in business transformations. Major IT projects involving business transformation efforts can be expensive and complex — and research suggests that many of them fail. Boards can help CIOs ensure that IT projects are aligned with business needs, deliver shareholder value and have business executive buy-in. And being involved in defining and measuring outcomes for these initiatives can help boards hold both business and technology leadership accountable for results.

A competitive advantage

Technology still helps businesses “keep the lights on,” but it can also be a powerful force for driving business growth and performance. As a result, many corporate boards are beginning to rethink the function of technology in their organizations and are considering how they can create a more tech-savvy boardroom.

Likewise, many CIOs and other C-level technologists are realizing that developing broader business skills positions them to help deliver technology’s transformation potential to businesses at both the strategic and operational level. The alignment of boards and technologists can help businesses drive growth, increase competitive advantage and effectively manage risks. 

“Many boards today still look like they did 20 years ago,” says a board leader. “It used to be good to have a bunch of CFOs in the room, but we are at a crossroads in corporate board structure. We need to get to the point where the majority of the board is tech-savvy.”

This article originally appeared in the CIO July/August 2017 Digital Magazine.