A company’s technological capability is now an essential part of its overall business strategy – it’s no longer just a service, with a cost; the board need to know what’s going on. A director with insufficient knowledge of the strategic issues facing a company is not only unable to help drive strategy they also fall short of their legal duties as a director.
It’s no longer enough to have one person on the board who “looks after all that”. Technological issues facing a company are now as relevant as its financial statements, which all directors are well used to scrutinising and taking responsibility for.
Here’s a test for you, as a director of a company in the digital age.
Do you (truly) understand the industry dynamics affecting the company?
Could you have a meaningful conversation about the issues with the CEO and the rest of the management team?
Do you know the degree to which technology permits the company's core business activities to happen, or conversely, which threatens its existing activities?
Do you know what the business is doing in response to challenges, and how it’s doing?
Have you checked for yourself the digital experience being delivered to the Company's customers?
Do you know the value the company is getting from its IT and digital assets?
Do you have a good feel for what digital assets the company has? Do you know what the company is doing to build, analyse and maximise those assets?
Do you have regular engagement on IT / digital strategy, and the associated risks?
Do you understand how exposed the business is to cyber attack, and data loss? Are you satisfied with the protections being put in place to prevent this?
The NZ Institute of Directors acknowledges that while the board does not have to be made up of IT experts, the directors – being ultimately responsible for the company and its business – must be sufficiently equipped to navigate the organisation to success in the digital era.
Digital technology is now a fundamental part of the business landscape. Whilst this doesn't mean that your organisation should be led by a team of IT experts, it does need to be driven by leaders who understand the potential that digital innovation can bring. Do you feel equipped to navigate your organisation to success in this digital era?