Does your board need a technical expert?
Imagine that a business wanted to outsource a particular business function, but no one on the Board of Directors had sufficient tech expertise to grasp why this might cause security issues.Investing in an upgraded network with a centralised administrator responsible for granting permission levels would resolve the problem, but the Board is reluctant to invest in something that it doesn’t understand. So ultimately the Board makes a decision based on cost and functionality, ignoring availability, reliability and security along the way.
At 2-sec, we see this situation time and time again; and it can be very frustrating and ultimately damaging to a company’s level of security.
Two years’ ago, Accenture published a report on the lack of tech expertise in the financial industry which reported that only six percent of the directors overseeing the world’s biggest banks had ANY technology experience. More than two-fifths of banks had no board members with professional technology experience at all.
In our opinion, we are continuing to face the same problem among small to medium businesses in the UK.
Not many directors are recruited solely for their IT expertise, but SME boards may have to start looking for members with at least a basic understanding of technology. How else can senior management comprehend the IT risks facing their company as well as taking advantage of any new technological advances?
As the Accenture report says, “Many of the biggest challenges…are intimately connected with technology so directors need a robust understanding of technology if they are to make informed decisions.”
Board members frequently lack the fundamental knowledge needed to ask intelligent questions about IT investment and competitive risk. Recruiting technology experts to the board is the first step, but the whole boardroom culture needs to change – to improve the understanding of the impact of technology on business.
Firms in industries such as manufacturing, need dependable, reliable IT systems that minimise downtime and any loss of profit. All businesses need robust disaster recovery and IT security procedures in place. So boards need to have greater technical knowledge to anticipate the problems that might occur, invest in suitable IT systems that will minimise difficulties, and that will also benefit their business from any technological advances.
How to solve this problem and improve your board’s level of understanding?
- Regular programs of personalised coaching
Accenture recommend that a consistent plan of training should be put in place to improve the technology knowledge of all board members. At 2-sec, we carry out regular training sessions for our clients, including one to one coaching, which is effective in plugging gaps in an individual’s level of knowledge. In our experience, working through case studies related to their industry, can also help board members improve decision making around technology challenges and can help in changing the board’s culture around IT investment decisions.
- Inviting an external CIO to join the board
At 2-sec we recommend that at least one person on the board should be an IT expert who should operate as a peer at the senior management and board level. However, recruiting an external CIO needs to be done carefully. An effective consultant should be a skilled communicator who doesn’t speak in impenetrable jargon or patronise board members. The focus should be on company strategy, without being bogged down in the final tech detail. The expert needs to understand the industry and technology challenges and opportunities affecting the business as a whole.
With technology disrupting virtually every industry in every country around the world, it’s clear that more and more jobs—up to and including the board level—will require technology skills.