Business does not need or want yet another silo-specialist on their board functioning as a czar in the technology domain of expertise. Rather, boards need experienced technology-savvy executive decision-makers who know and understand the massive jargon of the digital world, yet who can help fellow directors build their confidence and comfort in addressing technology challenges and making appropriate technology decisions that benefit the company and shareholders.
What boards do not need is a digital geek who limits his/her conversations to the other geeks in the company, creating isolated islands of competence just like his/her financial experts might have monopolized the conversations with auditors and accountants.
Boards cannot afford to pass the baton of expertise to specialists or to advisory boards dedicated to technology. This competency must infuse the organization if intelligent, cost-effective decisions are to be made that will benefit the whole entity.
There are very few technologists who are competent across the full spectrum of digital skill sets. Most tend to focus on a sub-area of expertise. Thus, if boards bring on a director for his/her digital acumen, without understanding the demands facing the company, then the board will probably be getting only part of the technology resources they need.
Boards and companies can think of technology as toys, string, or sand. Toys are all of the hardware which has changed dramatically over the past decades. Once toys were simple but huge standalone and dedicated computers which were then replaced by desktop then laptop then handheld and now wearable technology. Toys once were single-function, but today are now multi-functional.
Strings are all of the network system components, the wiring connecting everything to everything. This aspect likewise has evolved dramatically from hardwiring to fiber to wi-fi and Bluetooth to satellite connectivity.
Sand is all of the forms of content written on silicon, including the ones-and-zeros constituting millions of lines of software code, audio and video and the many forms that now comprise big data. Software includes operating systems, proprietary software purchased and open source security protocols spread across multiple layers, products, and locations.
Working with technology means being capable of making mental leaps from individual purchase decisions to the global consequences of those aggregated decisions across economies spanning continents. There is no one person who can address these issues for a board – no such thing as a Digital Director. All of the directors own the implications of every technology choice, just as every director owns the consequences of every financial decision and trade-off. Thus, all directors must become well-versed in as many components as their intelligence and skill sets allow.
To begin with, directors need to expect better clarity of terms than simply “digital” or “social media.” These are media buzz words that hold little specific value for the corporation, its investments, customers, employees, vendors/suppliers, or shareholders. Digital just means discrete information units – ones-and-zeros. Social media is simply software that allows individuals to communicate on a massive, uncontrolled scale (usually at zero cost or price). If a board is talking about “digital” or “social media” without further specification, then that is comparable to a board saying its financial issues consist of “numbers.”
What are the important technology issues for boards to address?
What are the business policies or strategies surrounding any given selection of or investment in toys, string, or sand? Does the business want to receive massive quantities of communications from customers? Does it want massive, unfiltered quantities of data about customers’ specific buying proclivities? Does the business want its employees to be tracking what is said about the company by everyone and anyone, everywhere? Or is the company only interested in the views of actual customers, suppliers, or competitors? Does the software used by the business identify those specific sources and timing of communication? Does the company track commentary by employees? Anonymously or with attribution? Does the company distribute information to external sources in a manner such that the impact of those communications on customer buying patterns can be measured and assessed? Is the company monitoring whether the words going out from the company are in compliance with established regulatory norms? How does the company define its brand reputation in the technology ether? How does the company protect its intellectual property from escaping through those same open communication doors?
Putting it in simplistic terms, does the company even know who is talking about it on Twitter, Facebook, or the major blogs in its industry sector? Does the company have intelligence tracking and monitoring those commentaries or has it delegated those tasks to some wunderkind because he/she “knows something about social media?”
Does the company know the level of external access others have to their internal data? Specifically, what data? Does the company allow employees to bring their own technology to work or to take the company’s information out the door? Is all or just some of the customers’ data secure? Is employee data secure? Do customers or vendors/suppliers access internal corporate information? Again, what specific information? Who is monitoring that access?
Has the company experienced denial of service attacks? Other external hacks? Does the board know how often these has occurred? Does the company or the board know what has been compromised? What was the cost? Does the company rely upon volunteer, open-source software? Does this create corporate vulnerabilities? Does the company have a sound, strategic release update strategy to ensure the latest system upgrades and protections are in place?
Are employees allowed to access personal accounts using company technology? Does the company know what employees access: Twitter, Facebook, LinkedIn, Workday, SalesForce? Or Hulu, Netflix, or worse? Are there clear policies in place so employees know their rights and responsibilities?
Does the company utilize software (or software as a service) tools to internally evaluate salaries in ways that would inform the company as to who are leading performers, whether executives are earning their performance bonuses, whether the company might be subject to allegations of unfair salary differentials? How effectively does the company and the board capture and utilize the “big data” repositories available to it internally and externally? Is the company aware of what compensation data might be going out the door to sites such as Glassdoor?
Does the company have sound strategies in place to evaluate and acquire new software systems crucial to corporate objectives? Does the company handle change controls effectively and efficiently? As the company considers possible mergers or acquisitions, is there a corporate team in place to evaluate and assess the costs of acquiring new systems or integrating legacy and new systems?
What does the company or board know about whether innovations such as Bitcoin, Crowdfunding, or the Cloud have an impact on the way the company currently does business or about how the company could be doing business in the future?
Does the company have an electronic “board book”? How do directors access board information? Who manages that information and how well do they protect it? Does the board meet electronically? Is the board interested in holding an electronic annual board meeting or a hybrid proxy meeting?
In short, what are all of the questions the board has not asked of itself with regard to technology? Does the board know what percentage of the total financial picture belongs to "technology" and what is the payback of that investment? And where can the board begin to get quality answers to all of these questions?
Technological expertise in today’s boardroom is as essential as financial expertise. It’s not just one person’s competency that matters in the boardroom. Today, what matters is how well all of a company’s directors appreciate the import and impact of all of the firm's technology on the entire business.