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Five questions to ask when creating a tech-savvy board
As published in 'NACD Directorship' magazine, The Power of Difference supplement, September/October 2019
Readiness requires fundamental understanding
By Janet Foutty
At a time when technology is the driving force behind change and growth in the business world, leaders must be able to anticipate and adapt to new technology. Yet a recent survey conducted by Deloitte revealed that only 26 percent of employees believe their organizations are "ready" or "very ready" to address the impact of disruptive technologies. At a minimum, readiness requires having a fundamental understanding of the technologies advancing business today, such as artificial intelligence (AI), robotics, blockchain, and cloud computing.
I’ve experienced firsthand the enterprise shift that occurs when technology becomes ubiquitous. When I was leading Deloitte Consulting LLP’s Technology practice six years ago, we carefully followed a "business-led, tech-enabled" strategy. Today, we operate in a world where it’s about technology-led business enablement. That is why, when I became CEO of our consulting business in 2016, one of my earliest strategic goals was to create a tech-savvy program for our entire organization, providing "non-tech" colleagues the understanding they need to have credible, thoughtful conversations that bridged their domain expertise with knowledge of the technologies impacting change and growth.
Now, as chair of the board of Deloitte, I believe boards can play an important, out-sized role in helping their organizations gain a more holistic understanding of technology and strategy that extends beyond managing risk. Boards can help identify the optimal value and impact of technology investments; understand the ethical implications of digital design and use; prepare for the talent implications of AI and robotics adoption; and increase the tech-savviness of the board as a whole.
To guide board conversations and strategy development around the intersection of technology, governance, and transformation, I’ve outlined five key questions that boards can use.
- Are we thinking about opportunities or solely about risks? A 2017 study by Deloitte reported that 48 percent of board conversations about technology are centered on cyber risk and privacy topics, while less than one-third (32 percent) are concerned with digital transformation driven by technology. While it’s critical for boards to understand technological risk, members also have an obligation to guide the company toward growth and innovation. To do that, boards must spend equal time discussing the many strategic opportunities technology affords.
- Are technologists represented? Other Deloitte studies show that high performing S&P 500 companies are more likely to have a tech-savvy board director than other companies (by 17 percent), yet less than five percent have appointed technologists to newly opened board seats. Adding a technologist to the board—for example, a current or former C-level tech leader—can bring both new skill sets and fresh thinking to the boardroom as it pertains to tech-related opportunities, risk, spending, and organizational strategy enablement.
- Are we committed to continuous learning? Given the rapid rate of disruption and change, the future of work requires everyone from the boardroom to the workforce at large to be committed to lifelong learning. While not everyone on the board needs to be a technologist, it’s important for all members to gain a foundational understanding of, and be conversant in, the technologies that drive change and opportunity. This level of understanding also ties into the board’s responsibility to monitor and advise whether the C-suite and senior management have the necessary technology skills needed to lasso value potential.
- Are we engaged with the office of the chief information officer? Whether through a designated committee or as a full board, members should dive deeper on technology topics with subject matter experts outside the boardroom. It’s up to each board to facilitate regular technology conversations, and if done via a committee, to ensure takeaways from those conversations are reported to the full board.
- Are we effectively identifying and managing the ethical implications of technology? A true understanding of technology requires considering the ethical implications of where and how technology is being applied. This includes mitigating unintentional biases and consequences, creating a diverse and inclusive technology organization, and overseeing growing technology ecosystems beyond your organization. As both understanding and the use of technology increase, innately human skills such as judgment and empathy should remain at the center.
These days, every board is a tech board, and therefore must focus on increasing their own tech-savviness—and helping their organizations do the same. In readying ourselves for the impact of technology, we can not only better manage its risks, but also leverage its many opportunities.