Educate the Board!

 
 
 
 
 
 
 
 

By Samuel Greengard

These days, CIOs are hard pressed to keep up with the rapid pace of change. Others, such as corporate boards, often end up choking on the digital fumes. The final result, not surprisingly, is less than optimal business decisions.

A recent survey conducted by PwC found that nearly one-third of corporate directors lack sufficient understanding of information technology. Remarkably, only 15 percent described IT as "critical" to their organization, though the figure rose from 13 percent in 2012. Nevertheless, one-third of boards are spending more time on IT, 61 percent want to spend even more time considering IT risks, and 55 percent take the same tact about IT strategy.

The reality is that a basic grasp of IT—and in many cases a strategic understanding—is now essential. Getting a board of directors up to speed is paramount. But this means more than simply understanding what an IT system or initiative does or how there's a business tie-in. It involves a deeper appreciation for business opportunities and risks, as they pertain to IT.

According to PwC, 32 percent of directors say they do not have a sufficient understanding of IT to support the company's strategy and IT risk mitigation. Only 22 percent of directors say they "very much" agree that the company's approach provides them with adequate information for effective oversight.

For CIOs, this situation represents both a challenge and an opportunity. On one hand, directors are more eager than ever to learn about IT issues and incorporate them into their decision-making. On the other hand, many of them lack a full appreciation for IT and the nuances of tech. In addition, they don't know where to begin. As a result, CIOs should spearhead the effort to educate boards. This can include briefings, regular updates about IT initiatives, and the use of social collaboration and other tools.

It's simple: a well-informed board equals a better-run company.

 
 
 
 

6 Comments for "Educate the Board!"

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  • Taina October 14, 2013 2:31 pm

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  • Matthew Heron October 02, 2013 7:24 am

    This is not surprising, as this general issue has been going on since the 90's. Information Technology is a very wide field with many specializations (e.g. networking, security, development etc.). Therefore, an IT practitioner can be considered a Digital Doctor, we prescribe solutions (remedies), diagnose and fix. And, we are almost on call 24/7. The Executive Management (Boards and CEOs) and the business itself depends heavily on Information Technology (IT). IT has become the heart of many organizations and without it, timely and effective decisions cannot be made. A part of the issue is that Information Technology is considered a technical environment, and while the internal working may have 'wires and cog wheels', it's directive is purely business oriented. Another part of the issue surrounds ownership and governance. Guidance through CoBIT (IT Governance) has not improved the outlook and when we continue to keep the CIO away from the executives, no value is added to either side. The title 'CIO' is considered to be part of the "C-suite" of executives (CEO, CFO, COO) but it does not sit at the same level in many cases. As such, until the executives realize that IT is a business element/function just as finance, marketing or operations, then we shall spend another two decades on this debate.

  • Karen Martyn September 28, 2013 12:50 pm

    Yes, the board needs education and it should begin BEFORE the majority of individuals are appointed to a board. EIT is the latest competency to emerge (we started with finance, then strategy, then marketing, then human resources, innovation and now EIT) as being critical to governing an entity competing for sales, funding, whatever. The myth is that one director with knowledge per discipline is enough but we know by experience that that is not true - we need sufficient knowledge to guide the collective decision-making, not one person in a group. I have high hopes that Elizabeth's research will lead to measurable screening criteria for directors (and boards for profiling and succession planning).

  • Elizabeth Valentine September 28, 2013 12:41 pm

    Miha you might be interested in my research website on this topic. My current research is about Board competencies for effective enterprise technology governance. www.enterprisegovernance.com.au

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