A poll conducted by ICSA: The Governance Institute and recruitment specialist The Core Partnership reveals that just 51% of Boards of Directors understand the challenges and opportunities that data and technology present to their organisations. Some 29% of the company secretaries who took part in the survey think that their Boards do not fully understand and a further 20% could only attest to ‘maybe’.
A lack of knowledge is viewed as the main barrier that prevents Boards from engaging properly with technology at a strategic level. Some 58% of respondents consider this to be the main obstacle, with 22% alluding to another reason, 16% citing language as an impediment and 4% blaming the on-boarding process.
Some of the main issues raised are as follows:
*The speed at which technological advances move means key aspects of the technology journey may not be provided in a timely manner
*It’s hard to find time in busy agendas to focus on the technology aspects
*Most Boards are made up of people who are of a generation that do not really understand the possibilities and threats offered by technology
*There has been a focus on the General Data Protection Regulation (GDPR) and cyber security, but that focuses on risks rather than opportunities
*Challenges arising from data management are more readily understood (eg the impact of poor data quality), but the real opportunities available to organisations through the effective use of data are less well considered (and especially through the ‘lens’ of commercial strategy)
Artificial Intelligence and automation
When asked if there were particular areas in which Boards needed to improve their understanding, a quarter of respondents chose Artificial Intelligence and automation. Other areas highlighted for potential improvement were using data effectively, the GDPR, cyber security and IT governance. Some 23% of respondents stated the belief that their Boards need to hone up on all of the areas mentioned.
Peter Swabey, policy and research director at ICSA, said: “The pace of change is such that new technology is emerging quicker now than at any time previously. This can be challenging for all Boards, but particularly so for those predominantly made up of people who are not ‘digital natives’. On top of this, changes in corporate governance, data privacy requirements and regulation mean that it can be difficult for non-executive directors to maintain an adequate level of knowledge across all areas. While it’s incumbent upon directors to proactively seek to expand their knowledge, there are time limits on what’s achievable given the part-time nature of the role.”
Swabey added: “It might be suitable for some organisations to have an IT specialist sit on the Board, but this wouldn’t be appropriate for all. Moreover, having one director with responsibility for technology might allow others to obviate their responsibilities, which is clearly not an option. As one respondent quite rightly said: ‘Technology is both an opportunity and a threat – Boards need to understand how it impacts the business both operationally and strategically’. This is a responsibility that all directors must share.”