As digitisation continues to evolve at a rapid pace, organisations need to assume a proactive role in their digital transformation.
Globalisation has changed the business ecosystem, adding a new layer of regulatory complexity and a wider need for directors to understand the business, its complexities, the competitive landscape, internal and external risks, and push for agility in the business in order to future-state plans.
A critical component of this is technology.
Previously, the domain of the CIO or CTO, with the final sign-off from the Board, to ensure that technology is integrated effectively and optimised for business growth, directors need to be expert and vigilant to ensure their companies reap results from all technology journeys.
The faster a company can develop and commercialise its ideas and bring them to market, the greater its competitive advantage and the more likely it is to grow the business and market share.
Technology is just one enabler of this growth. Equally important is how you recognise, value and protect your valuable intellectual property, according to KPMG.
Such a dynamic business environment complicates corporate governance processes, challenges directors and presents a challenge to boards and upper management to stay informed about new risks and opportunities that appear every day.
With these opportunities, risks and challenges changing daily, directors need to keep up or be seen as redundant in their digital decision-making position.
When it comes to critical technology investments, deeper board involvement can serve as a mechanism to cut through existing company politics partially because they aren’t involved in the daily machinations of people and teams working together – and this leads to the achievement and endorsement of larger technology investments in several ways:
Strategic alignment: When the board is more actively involved in technology decision-making, they can ensure technology investments align with the overall strategic goals of the company.
This helps circumnavigate internal politics as decisions are made based on the best interests of the organisation rather than individual departmental or personal agendas.
Oversight and accountability: A more involved board can provide greater oversight and hold management accountable for technology investments.
This reduces the influence of internal politics, as decisions are subject to rigorous scrutiny and accountability by independent directors who may have a broader perspective and experience.
Expertise and knowledge: Boards are individuals with diverse expertise and knowledge. When they are deeply involved in technology discussions, their collective understanding can bring clarity to complex investment decisions.
This can ensure that decisions are based on objective analysis rather than subjective opinions or power struggles. Experience also plays a role here – directors have often seen in their previous corporate lives when big tech investments go wrong. They have the lessons and learning to rely on there to help their companies avoid similar costly mistakes.
Encouraging collaboration: Deeper board involvement can foster collaboration between different departments and stakeholders within the company.
By actively engaging with various teams during technology investment discussions, the board can assist to break down silos and encourage a more unified approach. This reduces the impact of subjectivity as decision-making becomes more inclusive and collaborative.
External perspective: Board members often bring external perspectives and experiences from their roles in other organisations or industries and this diversity of experience is critical in today’s reliance on technology.
By considering a range of perspectives, the board can support larger technology investments that may disrupt traditional ways of thinking and land on solutions that may be new to the industry or company but not necessarily new to itself.
In the end, to achieve effective transformational digital integration you need a thoughtfully selected board for deep oversight, and this only happens by design.
Today, technology as functional expertise alone will not help boards reap its full benefits. Moreover, it’s a shared responsibility to know what is right for the business and to ensure it is implemented and monitored appropriately.
As with all business transformation, leadership skills and business knowledge are integral in helping every director understand the connection between technology and the business.
A well-assembled board aligns on company purpose and strategy, but critically today, digital strategy. When boards have the right knowledge, structures and culture they can help guide companies through the building of digital and technology gains.
Boards can help companies make the most of new opportunities, particularly in customer experience, manufacturing and supply chain competitiveness, efficiency, security and compliance.
Overall, deeper board guidance in technology investments ensures companies achieve endorsement for market leading technology initiatives. The end game is alignment with the company’s strategic direction through growth and value creation while mitigating potential risks.
For most companies today, no matter their industry, product or service, without this knowledge they will not reach their end game.
Cheryl Hayman is an independent non-executive director on listed boards Ai Media, Beston Global Foods and Silk Logistics Holdings.