In a speech I gave this week to a large room of directors in Montreal, I asked for a show of hands as to how many directors use iPads. About 80% of the hands went up. When I asked the question a year ago, the figure was only about 20%. If you are a director who does not own an iPad, request management purchase iPads for all your directors, or better yet buy your own. Request that your board have a board portal installed. Within a year, most boards will be paperless. Good boards are now paperless. If a laggard director blocks technology or refuses to up-skill, the director should be asked to step down. Technology has gotten a lot easier to use in the last year.
Information technology literacy at the board table is rapidly becoming a must-have for boards, ranking up there with international, risk management and executive experience as necessary boardroom conditions on director skills matrixes. Termed an information technology “revolution” by some directors, technology is rapidly changing how boardrooms and companies operate and compete. IT skills are necessary not only for prudent risk mitigation, but more importantly, for strategic opportunity, innovation and the way companies communicate with a new generation of investors, consumers and employees. Virtual meetings, electronic reporting and social networks are now becoming the new communications platforms. Mailed proxy statements, in-person meetings, and even email may be a relic of the past.
If your board of directors does not have a solid understanding of IT-drivers, such as cloud computing, big data, consumerization, mobile computing, cyber-crime, e-corruption and social media, which are increasingly pervasive / possible throughout all industries and B2B and B2C companies alike, it will not have the clout with senior management to operate. It will not recognize deficiencies, weak benches, red flags, product/service distribution channels, or even basic opportunities or relationships to exploit (such as fundraising for not for profits). Management –and the competition for executive and employee talent– will perceive the board as dated. Management and investors can now go online and find out whether a director is IT literate or not.
IT literacy can no longer be learned on the job or though educational primers for older directors, as the turnover and learning curves are too great. The world is changing and the notion that a 65 or 70-year-old former executive possesses IT competency is a myth. Generational shifts and emerging demographics need to be embraced by boards, including recruiting IT subject matter experts and mentoring first time directors. Women, younger directors and other directors with IT expertise must be at the board table to have the credibility and experience with management to drive change and ensure that boardroom discussion contains multiple informed perspectives.
How does your board fare on the above? Specifically,
- Does your board have enough strategic IT experience to advise management credibly?
- Do you have a full understanding of IT opportunities and threats facing your company and industry?
- Does the board have a committee that oversees IT risks, internal controls and reporting?
- Do the company and your investor relations department use social media and other emerging technologies (such as shareholder forums) for engagement with institutional and individual investors?
- Do directors use social media to listen and learn?
- Are you satisfied with the quality of IT management?
These are some of the questions that need to be asked at the board table. Boards likely won’t get past the second question or the wrong answer by management if they themselves are not IT literate.