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Technology’s influence on boards of directors
The evolution and adoption of new technology requires considerable attention from businesses. It can be a disruption, as they struggle to determine what new tech they should implement, and when, and which they can put off, and for how long. Overall, technology innovations succeed in increasing efficiency and productivity and moving business forward—delaying implementation can prove more challenging than early adoption.
Covid-19 undoubtedly accelerated the already lightning-fast pace of technology innovation, across industries. Post-pandemic, 91% of executives said they plan to maintain the accelerated speed of their digital transformation, or increase it.
As companies prioritize their overall digital evolution, they should recognize the need for a tech-savvy board of directors to give them a competitive advantage. Business can leverage their members’ tech expertise, to help them navigate the risks and opportunities that come with the progressing digital landscape.
Technology oversight is one of the many responsibilities of a company’s board of directors. Combined with the increasing need for comprehensive cybersecurity protocols—which remain item #1 of most company’s technology agendas—it’s easy to see why board members with technology expertise have become a need to have, not a nice to have. Beyond cybersecurity, boards are beginning to figure out how else they can use technology to advance their business objectives.
The role of technology in business continues its own transformation, from operational to strategic. One of the easiest ways for companies and boards of directors to ensure technology is prioritized is to have CIOs (Chief Information Officer) and/or CTOs (Chief Technology Officer) on their boards. A tech-focused board member should come with a strong understanding of strategy and operations, from the executive suites to the factory floor. They’ll guide the board in shaping a technology strategy that helps maintain a competitive advantage.
Benefits of Tech-Savvy Board Members
Technology is the root of so many of the risks and opportunities that businesses face every day. It makes sense that board composition has been affected by this evolution. Many boards are looking forward and anticipating that the need for a tech-savvy board will only increase. Having board members who are comfortable in the business and tech worlds is an advantage, and the consequences for boards and businesses that lack tech expertise are clear.
More than Cybersecurity. Technology touches every aspect of businesses and boards. In addition to ensuring that the company consistently employs the latest technology to combat cybercrime, boards also have to make sure their data stays private, that intellectual property is protected, and the business uses available technology, across all operational aspects of the company, to increase efficiencies and productivity.
Data-Driven Decisions. Technology influences high-level business strategy by evaluating incredible amounts of data, including industry metrics, market research, audience analysis, logistics, and more. Tech tools can help companies assess and analyze data to achieve scale, increase efficiency, and grow the business. Board members rely on this information to make well-informed decisions.
Future Proof the Business. Many new technology advances enhance or replace existing processes. We’ve seen the proliferation of telemedicine, travel websites, digital ads, robo-advisors, and more disrupt virtually every industry. The board needs to be agile and proactive, anticipating how evolving technology will affect their business, and ensuring it brings opportunity, not obsolescence. And they need to understand and respect the ripple effect that technology implementation can have across the entire organization.
Resource Allocation. Because the board’s responsibilities to technology oversight require sufficient funding, companies need representation at the board level. Members need to be knowledgeable enough to explain the importance of securing sufficient funding and ensure that the board has the resources it needs.
5 Ways to Build a Tech-Savvy Board
Companies that have boards with tech-savvy members outperform companies that don’t. Board members with tech/digital expertise will understand the importance of technology oversight and how technology is going to impact their business in the short and long term. They’ll ensure that the board is aware of any risks and prepared to take advantage of any opportunities.
- Make it easy for board members to learn and understand how technology can positively (and negatively) impact business.
- Communicate clearly. Sometimes people use words—like ‘ecosystem,’ ‘tech-stack,’ and ‘silo’—that mean different things to different people. Make sure you develop a common language, so communication is as effective as possible.
- Prioritize technology. Think of digital strategies as business strategies. Be clear, from the top down, that your company is forward-looking, and that technology evolution is an expected and welcome part of your business.
- Holistic approach. Make sure that the importance of technology innovation is shared through the company’s entire ecosystem.
- Network and Recruit. When it’s time to replace board members, you should have a list of tech-savvy options.
Board members who have technology expertise can significantly influence the overall direction and strategy of the board.
A tech-savvy board can be a powerful business advantage over the competition. It’s clear that businesses that use technology prudently can increase productively and help the business grow. That’s why so many board are re-evaluating the role of technology expertise in their boards of directors, and proactively building boards that can navigate the digital transformation.
Tag(s): Board Management
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