IT Expertise Is Needed at the Board Level

Jean-Louis Bravard, chairman of DotLondon and investor in several European and U.S. technology ventures, last month wrote in Harvard Business Review that he perceived a large gap between the experience of non-executive directors and that required “to challenge and support chairmen and CEOs in their quest to bring the best technology to their business.”

“Executive directors are usually selected for their leadership qualities; they often have experience with generalized management … rather than narrow expertise or technical acumen,” Bravard wrote.

The need for such expertise is becoming more critical as companies face overhauling outdated technology. “Only a multi-year, board-level sponsored effort can ensure a responsible IT overhaul,” Bravard wrote. “But without IT expertise at the director level, how can a board truly make an educated decision and, more importantly, follow it through until the end of the project, adapting the design of the overhaul over the course of years to take advantage of rapidly changing technology and consumer behavior?”

“Boards should be briefed periodically on the latest cyber threats, particularly to new technologies they introduce into their organizations.”

He recommended that companies enlist young “techie” entrepreneurs who could “rapidly educate the board,” and ideally rotate this role at least every two years. Boards should not rely entirely on advisers who typically give recommendations that are too generic, leading “to the predominance of the lowest common denominator.”

Companies should also be prepared to forgo their legacy technology altogether and invest in a more effective overhaul, instead of layering “old technology on top of ancient technology, bad on top of worse,” Bravard wrote. Boards should be briefed periodically on the latest cyber threats, particularly to new technologies they introduce into their organizations.

Professionals with IT expertise should serve on boards’ risk committees and audit committees, Lawrence J. Trautman and Kara Altenbaumer-Price wrote in their 2011 paper, “The board’s responsibility for information technology governance” published in the John Marshall Journal of Computer & Information Law.

Having such IT expertise on these board committees could “help avoid and address the costly private and regulatory lawsuits related to cyber issues that increasingly facing companies,” the authors wrote, noting that, “Every board’s challenge in addressing IT risk is ongoing vigilance and recognition of the mission critical nature of information technology to the enterprise.”

According to Kim Nash, managing editor of CIO magazine, companies ought to appoint more chief information officers to their boards. “IT-based products are the very future of business, Nash wrote. “Boards hold the heart of a company in their hands—they have to understand this stuff.”

She quoted Linda Hodges, head of the IT practice at recruiting company Witt/Kieffer, who told Nash that corporate CIOs might present information to the board, but often that’s not enough to make the types of decisions that could make or break organizational transformations. “Sometimes boards are asked to approve purchases and initiatives, and if there aren’t members on the board who understand IT, they’re making decisions in a vacuum,” Hodges said.

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Katie Kuehner-Hebert
Katie Kuehner-Hebert has more than two decades of experience writing about corporate, financial and industry-specific issues. She is based in Running Springs, Calif.

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