The Bias Against CIOs on Corporate Boards

The following is an excerpt from The CIO Paradox: Battling the Contradictions of IT Leadership, by Martha Heller.

[Part 1 of 3]

The fact is, I probably get more calls from CIOs interested in sitting on corporate boards than I do on any other topic. Despite evidence to the contrary, I am actually a nice person, and I like to be encouraging and give good news. But the fact is, very few corporate boards appoint CIOs.

This is a real paradox. We all know stories where a data security breach has wrought havoc on a company. We’ve seen as many situations where an IT innovation has given a moribund company a new lease on life. How can it be that corporate boards fail to see the value of a CIO’s perspective?

In the first of three blogs about CIOs on corporate boards, we’ll address “The Bias against CIOs on Corporate Boards." See future entries for: “The Case for CIO Board Appointments” and “Get Yourself Onto a Board.”

The Bias Against CIOs on Boards

1. Generational bias

With the pace of technology change at an all-time high, and with 20‑something CEOs making billions of dollars on technology start-ups, we forget that boardrooms are still populated by executives in their mid-sixties. “During their tenure as corporate executives, these people had an arm’s length to IT,” says Doreen Wright, former CIO at Campbell Soup and Nabisco, and
current board member at Dean Foods and Crocs. “Many experienced IT as a necessary evil during a time when the business would throw the order over the wall to IT. Board members still have this very dated and inaccurate view of the CIO being too technical, not having good communication skills, and not being able to talk in business terms," she says. "That’s a really old perspective, but because of the age of the sitting board members, that’s what they remember, and those biases die hard.”

2. Bad experiences

CIOs eager to sit on corporate boards also suffer from this CIO Paradox: Your many successes are invisible, but your few mistakes are highly visible. “Many board members have had a bad experience with IT,” says Wright. “An ERP project didn’t go well or they didn’t see the benefits of a particular IT investment. Regardless of all the good IT did for them, they have had
at least one bad experience, and they just can’t let go of it. They are predisposed not to like CIOs, and they won’t even entertain putting them on a board.”

3. Preference for P&L leaders

Believe it or not, CIOs are not the only victims of corporate board bias. “If you look at Fortune 250 boards, you see that not only are there very few CIOs, there are very few functional leaders of any kind,” says Wright. “Boards have to have a CFO, because they need a financial expert to lead the audit committee, but beyond that, boards will be heavy on CEOs and heads of business lines and light on functional leaders.”

4. The inner circle

Some 50 percent of board appointments are handled through search firms, Wright estimates, with the other 50 percent occurring through referrals. “And don’t let anybody kid you; it’s still an old boy’s network,” she says. As CIO, if you are not well connected to a network of CEOs, CFOs, and P&L leaders, you will have a tough time breaking in. Like Doreen Wright, Bob DeRodes, former CIO at Home Depot and board member at NCR and Veracode, broke in. Also like Wright, DeRodes started out in banking, where he assumed leadership roles in both technology and bank operations. But his career went in the opposite direction of Wright’s. Whereas Wright started out as a banker and picked up IT as an executive, DeRodes started out in technology and used that experience to move into banking. Either way, the result is the same. CIOs who have traversed the fiery pit between the business and IT at least once in their careers— they have run non‑IT operations or have run IT as a P&L— will have a much wider array of opportunities from which to choose, be it board work, COO roles, or general manager positions.

The greater the number of industries in which you have played leadership roles, the wider your networks and your perspective, and the more valuable you will be to a board. Wright’s industry involvement ranged from banking to consumer packaged goods. DeRhodes spent twenty years in banking operations and IT before moving to American Airlines to help form The Sabre Group. He then went back to banking as CTO for global card products at Citibank. Next, DeRodes joined Delta Airlines as CEO of Delta Technology. In 2002, he moved into a new industry altogether, becoming CIO of The Home Depot.

5. Ignorance and discomfort

According to DeRodes, “CEOs recognize the importance of IT in their companies, but they often don’t understand it. They are generally uncomfortable when dealing with technology, and they find the subject intimidating, frustrating, and incredibly boring. They understand that IT drives their factories and their supply chains and their marketing and their sales and service
organizations; they understand that technology closes their books and enables their financial ecosystem, runs their capital markets, runs their communication networks, and even pays their employees. They understand all that,” says DeRodes. “But for some reason, they don’t seem to be able to connect the dots that IT holds the dubious honor of being the sole function that, if disabled or severely compromised, could literally put the corporation out of business.”

CEOs are used to being the smartest people in the room. They typically have a healthy understanding of sales, finance, and business operations, having served as leaders over many of those functions. IT? Not so much. It takes an enlightened CEO to drag that subject matter into her board meetings.

6. Limited seats

Even for CEOs who are more comfortable with technology (and that number is, of course, increasing as the older generation of CEOs gives way to the new), CIOs just don’t rank when compared with the other possibilities. "If I am limited to eight or twelve board seat selections, I could bring in another marketing executive, or a key customer I want to bring closer, or a government official who could help us in some way," says DeRodes. "So, why would I blow that seat on a CIO?"

Is it hopeless?

At this point, you probably feel like you should just close this article and take a moment to mourn the loss of a board experience during your career. But fear not! In a blog post coming soon, we will build the case for boards to appoint CIOs. If you can't wait another minute, you can also rush out to amazon.com to purchase your copy of The CIO Paradox, and turn to Chapter 10.

[Read Part 2: The Case for CIOs on Corporate Boards]