Growing Requirement of Digital Experts at Board Level: Preparing CIOs and CTOs for the Boardroom
Technology has made a resounding inroad in boardroom discussions. And why not? It is the most powerful agent of transformation. Technology is redefining the way companies do business. It has improved their visibility, accessibility, internal processes and services.
On the one hand, we have the new age, tech-enabled businesses that are leveraging technology to deliver their products and services. The technology focus of the boards in the enterprises is a given. The boards are largely manned by tech-savvy directors, with CIOs and CTOs either themselves being business leaders, or working in tandem with the CEO.
It is the conventional and large sectors, such as oil & gas, pharmaceuticals and manufacturing, that present a strikingly interesting case. Embracing digitalization, cutting-edge tools and innovative technologies, these companies have been able to optimize processes, boost production and quality of products, and provide a better experience to consumers. Clearly, technology is no longer a support function. It is rather mainstream to gain competitive edge.
This has put the spotlight on the role of the CIO or CTO in these organizations. From being facilitators of technology, they are now evolving into critical business decision-makers. Their growing significance has raised a pertinent question about their relevance at the board-level. It is safe to ask now how board-ready are they.
Investments in technology are trending high. According to the latest data on digital transformation for 2023, compiled by Quixy, an intuitive, cloud-based platform for enterprise users:
The global digital transformation market would touch $1,009.8 billion by 2025, clocking a CAGR of 16.5% from $469.8 billion in 2020. US-based market intelligence firm International Data Corporation (IDC) estimates direct digital transformation investment to reach $7 trillion, registering a CAGR of 18% from 2020 to 2023, as companies build on existing investments and strategies in their bid to become future-ready digital enterprises. The World Economic Forum, on the other hand, believes digital transformation would add $100 trillion to the global economy by 2025.
Digital transformation, according to a US-based integrated growth consulting firm Prophet, is driven by market and competitive pressures mainly. High-profile data breaches mandating regulatory compliance is another impetus driving the transformation.
IDC believes AI technology will be integrated in 90% of new enterprise apps by 2025.
Digitally transformed organizations are projected to account for over half of the GDP by 2023, contributing $53.3 trillion.
The stakes are HIGH.
What does the arrow point to?
According to Bev White, CEO of global professional services organization Nash Squared, the growing discussion on technology at the board level is an “incredibly encouraging and healthy” sign.
In her February 2023 article in Computer Weekly, a digital magazine for IT professionals, she says that given the significance of technology, it cannot be left to “gifted amateurs”. The democratization of technology highlights the requirement of a leader at the board level, which is none other than the CIO.
What are the benefits of having a CIO or CTO at the board level?
Having a digital leader, a CTO or a CIO on a company’s board yields meaningful benefits, such as improved customer experience and shorter time-to-market. A CIO/CTO brings valuable expertise in agile methodologies and change management, crucial in today’s uncertain business environment where adaptability and innovation are key. Given the disruption and transformation facing digital leaders, organizational agility and operational efficiency are more important than ever.
CIOs and digital leaders are vital in helping businesses adapt and thrive, far beyond their traditional role of maintaining IT systems. They provide incisive insights for effective evaluation and prioritization of investment in emerging technologies, such as AI and big data. They also provide the right guidance for effective regulatory compliance that is non-negotiable for continued success and operational sustainability.
Digital leaders, given their long-term focus on technology transformation and drive, are capable of leading productivity and innovation gains.
Going the extra mile: Steps CTOs, CIOs can take to add valuable technology perspective as directors at the board level
The expert in anything was once a beginner.
Re-kindle the learner/beginner in you. That’s where all roads to effective contribution lead. According to serial entrepreneur Caren Merrick, co-founder and EVP of Nasdaq-listed webMethods Inc., self-discovery is the first step to achieving any goal.
This is especially relevant when visualizing a board-level position in conventional behemoths such as energy, oil & gas or pharmaceutical companies, where digitalization and technological advancements have added a fresh perspective to the roles and & responsibilities of the CIO/CTO. Given the significance of path-breaking technological solutions in improving processes and systems, it is imperative that the technology experts have a strong say at the board level and influence in decision-making.
(Comparatively, in new-age, tech-enabled businesses, where technology is core to operations, the CIO or CTO would already have found their voices at the board level.)
Starting with yourself is not restricted to the CIO or CTO alone. It is relevant for anyone at the CXO-level looking to serve on the board. This is applicable more so for companies operating in the conventional industry sectors where the board could be a completely separate entity. Here, any person at the CXO level may be invited to join it, including the CEO. So, how do you prepare yourself?
Why do you want to serve on the board? What are your aspirations? Have you articulated your strengths and ascertained the areas of development? Do you have sufficient expertise in line with the requirement? If no, how do you see yourself acquiring the knowledge?
Assess your skills, both core functional and leadership-related. See where you stand. Is being a sector expert enough? What about the executive competencies required to address an evolving market?
Self-awareness is crucial to align yourself with the board’s goals and targets. According to Harvard Law School, before serving on a public company board, you must consider and evaluate the responsibilities you will be expected to handle. Boards actively scout for members with a proven track record of leadership, relationship-building, integrity, communication skills, ability to achieve quantifiable goals. How do you fare vis-à-vis each?
Educate yourself about the board. Ask questions.
First, why are you choosing this board? Is it the size of the organization, the clout it holds, or was your decision based on functionality and stability of operations? Make a rational decision, based on scope to grow in terms of corporate governance and the credibility of the board’s current members with whom you will be interacting.
Are you aware of the board’s objectives? Do you know what board service is all about? No two boards are the same, and irrespective of your previous experience being on a board, you will commit a grave error in making assumptions about the needs or regulatory requirements. Assessment will give a lot of fodder for thought.
To become a board member, you must first become a boardroom expert. Directorships are earned, not given, and require a deep understanding of the difference between operations and oversight. Observe and understand the board’s dynamics, culture, and functional/operational aspects, constitution of committees, etc. Buttress your tech expertise with this approach to make the cut.
Embracing a beginner’s mindset will help you bring the fresh perspective the board expects or needs. Insights an individual who is still an outsider can add—a line of thinking the long-time serving board members may not foresee.
Is it a goal or a wish?
Depends on whether you have a plan—goals need incisive planning.
How will you build the directorial skills to translate your domain-specific knowledge into strategy? Which resources will you leverage to educate yourself about your current standing? How do you seek to gain the expertise?
Some steps, as listed by Harvard Business Review, are:
- Taking responsibility for your own P&L to build financial acumen; observing how assets, investments, and leveraging play in driving free cash flows; and listening to earnings calls online to stay informed
- Increasing exposure to your firm’s business model and understanding how it relates to strategy, operations, and economic value
- Pursuing opportunities to present to your board and gain decision-making roles
- Focusing on your assigned role and adding value to your team and beyond
- Improving your ability to work with diverse groups by joining cross-functional and cross-cultural groups and emulating precision in your work and interactions
You can avail of related books on preparing for board-level directorial roles, listen to podcasts by industry experts, forage on articles and all content available on the net, or you can hire the services of experts like Vantedge Search.
We offer bespoke executive coaching and mentoring services to empower leaders, including digital and tech experts. We work with you in mapping out your professional and personal achievements, and provide the coaching you need to articulate your extensive technical expertise as you prepare for leadership roles.
Sometimes, all it takes is a cup of coffee.
You can enhance knowledge by seeking advice from the board members you are familiar with. Discuss your career goals with experienced individuals who can provide valuable insights, such as your current CEO or other C-Suite members. Connect with colleagues who may be on other boards and get their insights on the functioning of boards and leadership.
(Here again it must be cited that some of the do’s & don’ts overlap for all CXO-level prospective members of the board. And more so when we talk in the context of the companies in the larger conventional sectors vis-à-vis the new-age, technology-enabled businesses.
The difference mainly arises from the nature of operations. In the case of the former, technology is transitioning into a mainstream function, whereas, for the latter, it is central to the entire business. Accordingly, the composition of the board for the two groups, with regard to the inclusion of a digital or tech expert, differs.)
Cultivate a broad network, or leverage one if you already have. Connect with other digital leaders, experts or problem-solvers. Tap into their insights to understand what challenges can surface in your specific role and how to address these. Above all, understand how you can shed a myopic vision focused on role and expand it to think from the broader perspective of the organization. This will help you unlock complex problems.
This will push you to come out of your comfort zone. When you connect with other board members, you realize the diversity of opinions. These are experts with a variety of skill sets and different perspectives. The more you interact, the more you learn.
Even better – you may see yourself as the digital expert, but these interactions will prick that bubble for you. Your perspective on technology or digitalization may not be the only one! Others on the board may have a unique, but original, take on the topic, reflecting deep understanding. How do they see integration of digitalization or technology in their respective functions?
Listening to and accepting other perspectives will not just help you build a wider circle, but also strike the right chord with the other board members.
There are no second chances to first impression.
Pay heed to presenting yourself to the board members.
Essentially, it is about how you engage with your board. Do people find you solution-centric only? Or do you encourage getting into intense, yet healthy, debates? Do you solicit opinions, or do you impose?
Perception matters – a lot.
The way you appear will motivate the other board members to engage with you. It is crucial for creating value.
For instance, you need to migrate to a new digital platform, but there is a certain risk in it.
Now, risk-taking is definitely a distinguishing factor for board members – and so for you, too. Also, it is integral to forward-thinking and could help you contribute to your role. But it has to be in the right measure. You can convince your board only when you have got this right.
Of course, you have done the due diligence, and the data is with you. But what about people with a contrarian mindset? How will you convince them? Did you consult them? Are you willing to make amends, such as a short trial phase before full-scale implementation?
Several aspects need to be considered, rising above any one fixation. The more you appear as a collaborator to your fellow board colleagues, the greater the chances of winning them over.
The presence of digital leaders like CIOs and CTOs on the board reflects a forward-thinking approach towards integrating technology into the highest levels of corporate strategy and decision-making. However, ensuring these leaders are board-ready is a significant challenge. This process requires more than just internal training and development; it often necessitates the expertise of specialized Technology Executive Search firms. These firms are adept at not only identifying leaders who have the necessary technical and strategic acumen but also preparing them for the unique challenges of board participation. By leveraging the expertise of Technology Executive Search firms, organizations can ensure that their technology leaders are not only experts in their field but also ready to contribute effectively at the highest level of corporate governance.
As we continue to witness rapid technological advancements, the need for skilled and strategic digital leadership in the boardroom becomes ever more critical. CIOs and CTOs must evolve beyond their traditional roles to become architects of change at the board level, guiding companies through complex digital transformations. The journey to the boardroom for these technology leaders is both challenging and rewarding, and with the right preparation and support, they can make a significant impact on the future direction of their organizations.