The flow of digital know-how into Executive Management teams is increasing, (CDOs, CIOs, and CTOs). In light of this, Amrop has examined the digital competencies on the Boards of the 110 largest stock-listed companies in 11 countries (in Europe and the US), and the professional backgrounds of 1280 Non Executive Directors (NED’s).
The study underlines the fact that boards across the globe still lack key competencies to handle digital disruption and technological advancements.
Key highlights of the survey are:
Niels Bentzen, Global Leader of Amrop’s Technology and Media Practice Group states: “Digital representation on boards is still at its infancy. We predict a substantial rise over the coming 3 years. Board composition must evolve, and this means integrating new, often unfamiliar, profiles.”
See: Top 8 Boardroom Challenges for Companies in Asia
On interviews with selected board members, the following insights were revealed:
Digital board members are role models and catalysts. They create innovation, new business models and new partnerships, and bring in fresh leadership talent. Some are building ‘corporate garages’ characterized by openness and entrepreneurship.
Online security is a priority for boards, but they lack full understanding. Breaches in security damage IT infrastructure, corporate finances and reputation, whilst rapid innovations are taking place in the areas of ‘cloud computing’, data aggregation, mobile technology and social media.
If they are to stay relevant, boards must balance risk management with digital innovation.
Many board members want to simplify processes and optimize their existing IT systems (such as ERP). Two goals emerge: the need to more efficiently deploy products and services, and to better engage with customers.
Digital change is often driven bottom-up by IT and/or Finance. Yet boards must take the lead, connecting strategy making, executive management and operations. Coaching and annual strategy days are two solutions.
Companies are directing their financial resources to different areas along a spectrum that spans digital security at one end and service innovation at the other. Performance optimization (and streamlined data gathering/processing), are a common thread.
Individuals in their early 30s who have a pure digital profile are exceptional, (although digital board profiles tend to be 10-15 years younger than average). The best players are ‘T-shaped’: experience of large-scale IT- and culture change, international leadership and enough board experience to challenge the status quo.
Also read: Why Are Few Women Found in the Boardrooms in Asia?
Image credit: amrop.com