Is Your Board Technology-Engaged?

With technology clearly a material driver of change, boards of larger companies are trending toward a more strategic focus on technology. Should your board be a part of that trend?

Why it matters: The board community has been acknowledging the speed of disruptive innovation, largely driven by emerging technologies.

Yes, but: There are also considerations pertaining to speed-to-market, technical debt, privacy, unintended consequences and regulation.

This is the reality that companies and their boards have faced for several years. Boards, given their organisations’ needs and their fiduciary responsibilities, must focus on how to organise themselves to engage the CEO and management team in strategic conversations regarding emerging technologies, their implications for the business and what to do with the data they collect.

Six key questions to ask:

Is the board devoting enough time to reviewing the company’s technology strategy, investments and operations?
Is there sufficient technology expertise on the board?
Is the board tapping outside resources with technology expertise?
Is the board satisfied that technology planning is aligned with strategic discussions of capital allocation to ensure relevancy?
Should technology be positioned as an agenda item for the full board?
Alternatively, should the board delegate its technology oversight to one or more standing committees?

Board Perspectives

Often the agenda of the full board is so crowded that it is not possible to give technology topics sufficient attention. In such instances, the board may delegate its oversight role to one or more standing committees. This decision may involve the following actions:

Assigning aspects of technology oversight to one or more of the strategy, finance, investment, audit and risk committees. When delegating technology oversight responsibilities to one of more existing committees, the board should assess whether other items on each designated committee’s agenda may result in overload. If so, the technology conversation assigned to it may receive short shrift.
Creating a stand-alone technology committee. If the technology discussion is of such a complex and specialised nature, a more focused conversation may be needed to enable long-term strategic thinking on the implications of technology trends for the business. These committees can take different forms as the specific areas of focus may vary by organisation, so the no-one-size-fits-all caveat applies. A decision to form a technology committee implies that directors with the requisite qualifications are available to sustain it.

The bottom line: Regardless of the approach taken to engage management on technology matters, every director should be technology-engaged.

Read more here.

(Board Perspectives — Issue 166)

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