As CIO, what can you do to develop a great relationship with members of the board of directors? Fortium Partners' Terry Bennett has several practical suggestions in his latest guest blog.
Corporate boards are more concerned than ever about technology and its effects on the company.
They read about the adverse effects cyber-attacks have had on companies in terms of lost revenue, legal woes, and erosion of customer trust. They hear about website failures during critical times and understand the potential for both short-term and long-term consequences. They see stories of revenue and productivity loss, even business failures resulting from interruptions to a company’s technology. They know that one dissatisfied customer can use social media to ignite public outrage against a company. They’ve seen entire industries disrupted by new technologies and companies fade from existence because they failed to adapt to technological advances.
But on a positive note, more board members see how technology is unlocking new business models and spurring growth. They are convinced of the growing need to focus on speed, agility, innovation, and customer obsession, and see that it requires new approaches to business operations and to IT investment.
Corporate boards still lack technology expertise
Technology and cybersecurity have historically been seen as compliance issues under the purview of the board’s audit committee. However, given the increasing capability of technology to affect revenue and the business model, there is a greater recognition of its strategic importance. This has led to an increase in the number of CIOs and other technology experts being appointed to boards. Still, though, the majority of boards lack the technology prowess needed to successfully guide today’s digital era company.
What, then, can the CIO do to bridge the gap and develop a great relationship with the board? Here are a few practical suggestions:
- Ask the CEO and CFO for help. If you haven’t engaged with board members before, the CEO and CFO can help you get started and mentor you along the way. Be sure to keep the CEO advised of any communication you have with various board members outside the meetings.
- Engage regularly. Meet one-on-one with each individual director on a periodic basis. This provides them an opportunity to ask questions outside the board meeting. Gain an understanding of their hot button issues and concerns. Use this information to keep them up-to-date on things happening inside and outside your company that affect their specific areas of interest. Learn what additional information you might provide to help in their oversight duties.
- Educate. Embrace any opportunity to talk with a board member in business terms about the benefits technology can bring to your company. Be sure to address revenue generation and competitive advantage in addition to the more common productivity gains and cost reductions. Focus on the growing need for speed, agility, and innovation and how this often requires not only technology but also a different type of culture within the company. Stress the need for digital skills to be embraced throughout the organization. Discuss how technology can help your company better understand and relate to your customers. Emphasize the value to be gained from more data-enhanced decisions.
- Talk about risk. Risk oversight is a key responsibility of the board. Talk about what you are doing to identify and mitigate various risks. Ensure you understand the board’s position on the company’s risk appetite and tolerance. Discuss various aspects of risk including compliance, security, data leakage, business continuity, and reputation. Be sure to address applicable risks associated with third parties such as your outsourcers or vendors.
- Lay out the future. Present your vision of how technology will affect the future of your company and the industry. Address potential technological and business disruption. Present a high-level view of how the company’s technology roadmap is tightly integrated with the corporate strategy.
- Show them the money. Talk about the amount of money being spent on technology within your company. Break out for them how much is being spent 1. keeping the lights on, 2. growing the business, and 3. transforming the business. Emphasize your efforts to minimize the everyday costs of running the business to funnel more dollars into innovation, and be sure to include the dollars not under your direct control. Provide a comparison against the technology expenditures of your direct competitors as well as against an industry benchmark. Review the governance processes in place to ensure that technology dollars are being spent where they can best benefit the company. Highlight some of the business benefits gained from recent major projects (and do not forget to give credit to your fellow business executives).
A company can benefit greatly from a close relationship between the CIO and the board of directors. What other suggestions do you have to advance this relationship?