The New Board Diversity Test: Do You Have a Tech Expert?

Having a diverse board is a hot-button issue with many companies and their shareholders. Gender diversity, ethnic diversity, age diversity are increasingly seen as important milestones for boards to meet.

But here’s another one, not talked about so often: technology diversity. Does your board include members who could be considered either tech experts or tech thought leaders? Who understand the importance of IT in the modern enterprise? Who understand how technology drives innovation? And isn’t that where the future of your business resides? If you don’t have a tech expert on the board, don’t feel too bad. Even the President’s advisory board on the National Security Agency—one of the most high-tech users in the world—lacked a tech expert until this past February.

At the start of the 21st century, tech savviness was not seen by many companies outside of the computer industry as an important board must-have. Isn’t that what IT departments are for?

Making the case

The fact is, yes, many companies probably do need a digital thinker on the board, and the reason is that most companies are evolving into digital businesses. They sell online. They definitely market online—global social media ad spend last year was estimated to top $23 billion and rising fast. Internally, the enterprise runs on business software. Employees communicate electronically. Field reps rely on tablets or steroid-induced smartphones to access data back at HQ, and every business is using software to automate their operations and to gain a competitive edge.

It’s difficult to imagine how a board could conduct company oversight on behalf of shareholders without some fairly sophisticated understanding of how technology is used (or should be used) in its own company. One example: the arrival of cloud computing.

Cloud is not just a set of technologies hosted on cost-efficient remote servers. To do cloud right, a company has to rethink its business processes, the capabilities of its employees, its go-to-market practices—a whole range of decisions on the business side of the house. These are strategy and organisational design choices that affect the bottom line. And those should wind up in the boardroom, not on the CIO’s desk.

Here are some additional reasons to make your board tech-friendly:

  • Cybersecurity is a board-level issue. IT can provide technological advice, but the board needs to evaluate business risk and approve recovery processes.
  • Software spend is expected to increase. In fact, it’s expected to grow by 5% in 2016 among global enterprises, and the overall IT spend will gain 0.6%, so boards need to strategise how that allocation should flow.
  • It helps your brand. A high-profile board member with this expertise can attract premier programmers, developers and designers—the foot soldiers of future growth.

Where to hunt

The problem is that finding such a board candidate is not easy; it’s a relatively small pool. Ideally, you want someone with tech chops (but not necessarily an engineer) who has a business background. You can find candidates in a variety of locations, including a consulting practice, another company’s CIO or founders of successful tech companies. Not so fruitful are the worlds of academia and research, where potential candidates might lack the necessary business grounding.

Can modern boards get away with not having a technology guru on board? Of course, especially if technology is not a competitive differentiator for the company. And individual board members may have their own contacts in tech-related fields whom they can call upon when needed.

A board can still be tech friendly without the presence of “techies” as long as members understand the importance and benefits of digitisation. Establishing a technology advisory committee is another option, with the added advantage of having a number of cross-function, multidisciplinary experts who can provide guidance with a broad perspective.

But as business becomes increasingly digital, more and more boards are choosing to fill out their ranks with thoughtful tech leaders. It’s worth consideration.

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