By Meriel Lenfestey, Institute of Directors Committee member, non-executive director and digital strategist.
The world is now changing faster than it ever has before.
The internet and technology are changing everything, across all industries. Technology is transforming the way customers engage with brands, the way companies think about and manage their assets and the way markets are controlled. Technology lets everything become connected in a way which creates huge potential, but also huge risks.
Companies which embrace these changes succeed, those that don’t fall behind rapidly.
This change should be at the heart of boardroom conversations for all companies. And yet, in most cases boards consist of directors who are at best lacking in digital knowledge and confidence, and at worst avoiding the issue.
The IoD in Guernsey sees this information technology transformation as a huge opportunity for our islands. With limited physical resources, our future lies in industries based on information. Governance of businesses dealing in information in a global context requires digital awareness. The IoD has announced plans to equip our islands’ directors with the skills they will need.
So what skills do the directors of today need to shape the companies which will survive tomorrow? The skills fall into three categories:
Governance and Oversight
This is nothing new for directors but often gets a bit hazy when dealing with technology. It is critical that all directors are equipped to:
- Retain oversight of digital assets (not just physical);
- Include technology in the auditing process;
- Ensure the risk register accurately represents the risks associated with technology; implementation, security and inertia, and the exposure points resulting from the full technology ecosystem including suppliers:
- Embrace the rich insight that data analysis can provide in the way of KPIs to monitor and drive the business forward;
- Adhere to regulatory requirements which are impacted by digital, e.g. GDPR and freedom of information requests.
Vision and Risk Appetite
Boards must lead their companies to the future, not be the brakes on change. A board which resists change, and sees only the risks, will not be acting in the interests of all stakeholders.
Directors must embrace innovation and encourage transformation towards a clear vision of the future. This requires a basic understanding of what’s technically achievable, an imagination to connect this to future customer needs, and some courage across mid- to long-term time horizons.
Behaviours and Structures
Directors have a shared responsibility for their decisions. They like to ensure they collectively fully understand and will resist actions where they don’t. In the absence of deep technology knowledge on the board, this will lead to inaction.
Boards need to find ways to bring this knowledge into the debate in a way which drives sufficient comprehension to enable decision making. They must bring in technology skills, empower others and seek expert skills from within or outside the organisation. For some companies, there may be a role for a formal technology committee to advise the board.
The opportunity is here for Guernsey to lead the world in developing digitally-savvy directors. Our local IoD branch has a history of trailblazing for director training and is working with the GTA on a professionally accredited digital leadership and innovation programme aimed at director level, which will be endorsed by the IoD. Details of this course will be issued in the coming months.