WHAT SKILLS DO DIRECTORS NEED TO BE RELEVANT IN A DIGITAL AGE?
It is imperative for all board directors to possess a fundamental understanding of technology and how it affects and influences strategy. However, it is important to assess whether your board has this level of understanding. Asking a few questions can help you evaluate your board's technology capabilities and identify if you are lacking a crucial skill or experience.
Firstly, consider whether your directors have received training in technology. While having a CIO, CTO, or Chief Digital Officer on the board can provide technology strategy and risk guidance, their usefulness is limited if other directors do not have the knowledge or context needed to make informed decisions. Poor decisions based on incomplete or misunderstood information are more likely in this case. A Digital Director can educate and advise the board and recommend external training opportunities and consultants to improve each director's knowledge and confidence in making technology-oriented strategy decisions.
Secondly, evaluate whether you have a technology-oriented person on your board who can engage in longer-term discussions regarding strategy, technology trends, and oversight. While good technology insights are important, a "technologist" may be too technical or jargon-heavy to understand the underlying issues and opportunities. Instead, someone with a strong understanding of general management and strategy can contribute to board discussions by understanding how technology can be used to create opportunities or erect defensive walls, asking good questions that help other directors understand all the implications of new technology, and developing frameworks that assist board decision-making and inform other directors.
Thirdly, consider whether discussions about technology disruption or digitally driven opportunities are a regular part of board discussions. Is management required to present digital and technology roadmaps to stimulate conversation? Does the board engage in meaningful conversations about how competitors are using technology? Is there someone in the firm tasked with tracking competitive technology moves or initiatives that can help directors understand the ramifications of such initiatives?
Lastly, evaluate whether the board follows up to ensure that digital and technology initiatives deliver the promised value. Are there follow-up board reviews of strategic initiatives, and what are the lessons learned? How does the board react to favorable or unfavorable outcomes?
Technology has an oversized impact on every industry, company, and competitor. Therefore, significant changes in tech or digital strategy that impact a material part of the company or customer experience must be a board conversation. The question is, "does your board have the knowledge, insights, skills, processes, reporting, and communication expertise to identify real, not shiny object, strategic opportunities that will work for the company?
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