2019 Report on global technology oversight practices

Board Room Practice: Technology Governance

The data presented in this report provides unique insights into global board room practices. We cover Technology Governance, which looks at accountability and decision making on digital and technology. Overseeing how technology is managed is crucial for strategy setting and managing risk, especially with AI gaining prominence and cyber risks keeping directors on high alert. Our findings go well beyond the demand for more technology expertise in the board room: Directors shared their assessment of board room debates and decision making on matters digital. Faced with accelerating change and high ambiguity directors might take a fresh look at how business and technology collaborate.

Bytes in the Board Pack

53% of directors find technology related papers in their board pack every time the board meets. No surprise there. An alternative way to assess the relevance of technology is looking at the strategy process: 40% of directors find that strategy is largely driven by technology. It appears to be very challenging to adjust the strat-egy process to the pace and dynamics of technology. Only 26% of directors think their strategy process is accommodating tech-nology well.

Power of Data

All boards are exposed to technology, but not all are well prepared for it. In 2018 we conducted this survey, because we believe in the power of data. Making the situation measurable will help address it. We reached out to the 75 participants in this survey through our partners and our professional network. The participants serve on more than 80 boards globally. About 50% of organisations are European and the remainder split between the Americas, Asia and Africa. The survey covers a wide spectrum of industries. Com-bined, ICT and Finance represent 50% of the data set. Both sec-tors are naturally leading in technology adaption. We shall expect the responses from directors to reflect that.

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25%of directors told us that a Technology Committee is preparing decisions for the board.

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Manage Ambiguity

Many technology topics come with a high level of ambiguity. If a topic is ambiguous, different people interpret a matter differ-ently and often explanations are not exact. Assessments of ambig-uous matters can differ widely. Today, the challenges of managing ambiguity are compounded by the pace of change. Board deliberations on technology need time and a culture of non-threatening debate. Only 17% or directors polled are really satisfied with the quality of debate. For emerging themes such as data governance and AI, policies and regulatory frameworks are often missing. The values and ethics of the board members are setting the boundaries for many decisions - which makes a healthy debate even more important.

Acquire Talent

37% of directors reported that technology expertise has been a significant criterion when appointing a new director. We observe a slow but steady trend towards requesting more technology expertise when appointing directors. The fact that directors are appointed for several years and few roles are filled every year makes for slow progress. The growth of technology expertise in the board room is not keeping pace with the strategic needs of many organisations. Looking back over the past two years, across the globe only 33% are satisfied with the growth of technology expertise in the board room. Directors from Africa are the least satisfied.

Geek on Board

A Technology Committee is an effective way to make better use of scarce knowledge. The members of the Technology Committee can dive deeper, schedule time for learning and manage the dig-ital agenda with more flexibility. However, ultimately the board is responsible, and a committee can only prepare decisions of the board. A mere 26% of directors polled are satisfied with the tech-nology expertise in their board room. Since all are responsible for the decisions made, how deliberations are managed is crucial. But

79%of directors are not satisfied with how responsibility for technol-ogy is shared across the members of the board. A geek in the board room is good, but the efforts to improve technology governance should not stop there.

Collaborate with the Technology Team

The key to better technology governance is regular consultations between the board and the technology team. 45% confirm this by reporting that they interact for every board meeting. Choosing a committee as a platform can help to stay “above the weeds and below the clouds”. Directors may feel intimidated by technology lingo, which can significantly hinder the conversation. Banning 3-letter acronyms is a proven recipe for increasing understanding and building trust.

Better technology governance needs a foundation of trust: Trust among directors in the board room to foster a healthy debate. Trust between the technology team and the board for better deci-sion making, risk management and strategy setting. 28% of respondents shared that the CIO / CTO / CDO is a board member. Most of these organisations are highly dependent on technology and usually have interaction with their technology team for every board meeting. This is one ingredient to forming a trusted relationship. There are others, which include regular meetings or workshops in small settings, to create an environment for inquiry and learning - for both, the directors and the technol-ogy team. Asked for a self-assessment, only 36% of directors think they provide the best support to their technology team. There is room for improvement here!

Build Trust

Conclusion

While the knowledge about technology in our board rooms may not be satisfactory, it is gradually improving. That is good and needed, but not sufficient. As the pace of change is accelerating, it won’t be feasible for individuals (director or otherwise) to keep up learning all they need to know. This is why the debate should shift towards skills. Skills in demand include managing ambiguity, communicating across the boundaries professions and sectors and building trust. An indicator that this is truly needed are the 83% or directors who are not really satisfied with the quality of debates on technology in their board rooms.

This survey was conducted providing full anonymity to the respondents. Through our network and collaborating with part-ner organisations, we reached out to 75 senior executives around the world to complete this report. We are expressing our sincere gratitude to all who contributed to the success of this report.

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70%reported that they find recurring technology topics on their board agenda. Regular exposure and re-visiting topics is very beneficial when managing ambiguity and helps grow technology expertise.

About Acoyvis

Acoyvis is a boutique consulting firm. We speak Business and understand Technology. Our board services include training for directors (overseeing cyber risk, technology governance), work-shops between the board and the technology team, key note speeches and coaching for directors. We serve clients in Europe and Africa.

Susanne Alfs founded Acoyvis in 2008. She is dedicated to make change a rewarding expe-rience. A key ingredient is trust between business and technology teams. In leading from the top, Susanne works with directors to achieve better Technology Governance. Since 2016 Susanne serves as a non-executive director and chair of the Audit Committee for a regulated financial services firm. Her prior career included top management roles (CxO, VP) and con-sulting assignments for several Fortune Global 500 companies.

+230 525 03858  • office@acoyvis.com • www.acoyvis.com

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