A poll from ICSA: The Governance Institute and recruitment specialist The Core Partnership reveals that just 51 percent of boards understand the challenges and opportunities that data and technology present to their organisations. Contributor Peter Swabey, Policy and Research Director – ICSA.
Some 29 percent of the company secretaries who took part in the survey think that their boards do not fully understand and a further 20 percent 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 percent of respondents consider this to be the main obstacle, with 22 percent alluding to another reason, 16 percent citing language as an impediment and 4 percent blaming the onboarding process.
Some of the main issues raised were as follows:
The speed at which technological advances are at pace means key aspects of the technology journey may not be provided in a timely manner
It is 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 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 the organisation through the effective use of data are less well considered – especially through the lens of commercial strategy.
When asked if there were particular areas in which boards needed to improve their understanding, a quarter of respondents chose AI and automation. Other areas highlighted as possible areas for improvement were using data effectively, GDPR, cyber security and IT governance. Some 23 percent of respondents stating that their boards need to hone up on all of the areas mentioned.
According to Peter Swabey, Policy and Research Director at ICSA: ‘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 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 is incumbent upon directors to proactively seek to expand their knowledge, there are time limits on what is achievable given the part-time nature of the role.
‘It might be suitable for some organisations to have an IT specialist sit on the board, but this would not be appropriate for all. Moreover, having one director with responsibility for technology might allow others to obviate their responsibility, 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.’