One of the common features of board effectiveness reviews is to assess the composition of the board: does it have the right mix in terms of skills and experience? Is it diverse in the widest definition of that word? What will the board need for the future challenges of leading the company?
When I ask directors during the interview process are there any skills they believe are missing, my recent experience is that all roads lead to digital or IT. (Conversely, alas (from my perspective) no one seems to want a lawyer as a fellow board member but maybe that says more about us as a breed!)
“Ian, we could really do with someone with digital or IT experience on the board – it would be so useful to help us on the technology issues we are facing as a company,” is the mantra that comes back time and again. I am hoping that, in a time of increased virtual meetings, this answer is not reflective of having someone who can work out what to do when the technology fails!
While there appears to be a widely held belief that adding an IT specialist to your board is a smart idea, I would question whether it will really increase its effectiveness. At the very least I believe it needs careful consideration:
- First, any new NED has to bring more than their specialist skill to the boardroom table. They have to contribute to the whole of the board agenda and debate if they are to be effective and whilst they need not be an expert in every area, they do need to contribute fully. No board can have every skill represented at the boardroom table and so while it is important to recruit some specialists to the board – for example, to service the specialist committees, they need to be able to add more than this alone. I have seen boards recruit IT specialists who are steeped in technology but did not, or were not able to, add more value than this. That’s a waste of a scarce board position.
- Second, as one NED once said to me, many board members will have a working knowledge of IT and digital as these are areas that they were responsible for in their executive careers. They did not need to be experts in IT then as they could draw in on the expertise within the company; and nor do they need to be IT experts now. They need to be able to ask the right – and challenging – questions and to look at where to gain expert advice whether internally or externally but their role is not an operational one, it to challenge and oversee.
- Which leads me to my third point: are boards looking to recruit an NED with an IT background because executive management is wanting in this area? This seems to be quite a common issue that arises in board effectiveness reviews. The answer here is not to recruit an IT savvy NED but to ensure your IT team and CIO in particular are up to scratch. That is going to be more important to the success of the company than recruiting an NED to do this who may end up being a de facto CIO (and that will cause real issues for the board).
- Fourth, many boards get themselves confused about “IT experience”, by which they often mean the management of large IT change programmes often with a legacy IT system component – and “digital experience”, by which they mean new digital channels to market, e-commerce, online interaction with customers, AI etc. If you are going to recruit – for any NED position – there is a need to clearly define what you want or need otherwise you’ll end up with something else!
- Finally, one of the weaknesses of recruiting an NED with IT experience is that, given the nature of technology, that expertise goes very quickly out of date. Unless they are serving as a CIO elsewhere, their knowledge will soon be of limited value around the boardroom table.
If you are concerned about your board not being IT savvy (and no, I am not talking about how to use Zoom!) there are other ways of gaining this: expert speakers coming to present at meetings; NEDs buddying up with IT department members; external courses, to name just three. You don’t need to donate a seat at the board to achieve this! So before your nomination committee goes on the hunt for a digital NED, I hope it will give some real thought to whether digital is an answer to all your problems!