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There’s no ignoring the fact that technology is playing an ever more vital role in business, but in many organisations IT still isn’t afforded the privilege of representation at board level. Despite technology no longer being a back-room function, IT is often consigned to the lower ranks and considered a supportive role, rather than a leading one that helps in setting out a company’s strategic direction.
However, as businesses are increasingly governed by digital change, more and more c-suites are pulling up a pew for a techie in the boardroom.
Technology is reshaping the models of almost every sector. It’s seeing businesses completely overhaul their processes in order to satisfy tech-hungry customers and suppliers. You only need to look at how mobile use has transformed the retail and banking sectors, or how Uber has pretty much displaced the traditional taxi business model, to appreciate the impact of digital.
This year’s CEO survey by PwC found that 83 per cent of UK CEOs believe digital skills to be important to their organisation, with 64 per cent saying that technology has significantly impacted or even reshaped competition over the last five years alone. What’s more, last year’s report found that CEOs are convinced that technology will transform stakeholder expectations of business in the following five years, with 77 per cent of business leaders naming it as a top-three influencer. And a study by MIT in 2013 found that, on average, digitally adept companies could be up to 26 per cent more profitable that their competitors – which will only increase.
However, there remains a lack of representation in the boardroom for IT, leaving the boards of many companies ill-equipped to tackle these shifts. Traditional board members may simply lack the expertise required to make decisions regarding investment in software, for example, and taking the business forward in a digital age. Thankfully, this risk is something board members tend to be aware of, with PwC’s 2015 survey finding that 85 per cent of the respondents were dissatisfied with the way their companies were “anticipating the competitive advantages enabled by technology” and that 79 per cent don’t think their boards sufficiently understand technology.
While the ubiquity of technology is undeniable, the requirement of IT representation on the board depends on the nature of the industry and how pivotal a factor technology is for the company’s success and for setting itself apart from competitors. For some companies, improvements to technology simply make sure the company ‘stays in the game’ and maintains efficient operations, in which case board representation may not always be necessary. However, at the other end of the scale, companies may depend on getting technology right for their future viability. It goes without saying that in these cases, someone with technological expertise should have a prime place in the boardroom. Most companies lie somewhere in the middle, but the landscape certainly suggests a shift towards the latter.
Of course, it comes down to finding the right person because, after all, the right candidate – while contributing valuably on a technology front – must also have a good grounding in business more generally if they’re to help make a wide range of decisions that will affect the company as a whole.
Having a technology expert on the board will affect all manner of business decisions; for example, where funding is allocated, recruitment, security and the incorporation of new technology as the digital landscape evolves. It’s therefore important to proceed with caution but, with the weight technology is set to continue to hold in the future, the advantages of an IT board member can’t be overlooked. In addition to those already mentioned, having technology representation:
Companies all over the world are evolving to encompass technological innovation. C-suites, therefore, are expected to reflect this by appointing directors with the appropriate experience and know-how; people who can capitalise on the technology available to drive forward business objectives and, ultimately, increase revenue. Without this, and by refusing to face up to digital change, they risk losing their competitive edge.