CIO as a Board Member: Are You Ready?

Until recently, we’ve had debates and plenty of reading material on topics such as “How should a CIO present to the Board?” or “How should a CIO engage with the Board?” Now some interesting data has emerged which tells there has been a 74% increase in the number of CIOs serving on Fortune 100 boards in the past two years. A recent article in Harvard Business Review titled “Why CIOs Make Great Board Directors” refers to some unpublished data from Executive Search firm Korn Ferry. The data indicates there is a heavy demand in the industry to have CIOs as board directors. As quoted in HBR, “CIOs are most sort-after directors.” The article, which is authored by Craig Stephenson and Nels Olson also indicates there is room for growth because currently only 31% of Fortune 100 boards have a director who is a CIO, even though technology is at the core of every business today. 

For a community manager like me, who has always propagated CIO as a strategic leader, it is an interesting piece of data. I have always had a strong opinion that a true CIO brings undeniable benefits if chosen for a seat in the management or company board. World over, dramatic changes are taking place due to the adoption of digital technologies. These advanced technologies are beyond the understanding of Board members who are either totally unaware of them or are too reluctant to understand the nuances. These technologies have spurred the growth in technology governance issues. They have also given birth to innumerable business risks and have made organizations more prone to cyber attacks. In such a scenario, a CIO becomes a natural fit into the Board of Directors and strengthened the company.

Hypothetically, if that is the case, what happens to vast majority of Boards, which run without a CIO? Is it necessary to have CIO as part of Board? Is it not sufficient to have CIO invited to regular board meetings for briefing? I am putting these questions deliberately. Ever since I began working with the CIO community, the question whether CIO should get a hearing at the Board level, has always been on the top of the agenda.

A slightly dated article published by talks about a survey done in 2016, which revealed that 45% of board directors believed being technology savvy was the most unrepresented skills in the modern boardroom. “The constant evolution of technology makes it hard for board members to keep on top of the current trends, particularly within a larger business context.” It simply reiterates the claims made by the Korn Fery data that the Boards, going forward, would increasingly embrace CIO as a member to not only safeguard the company from risks but also take advantage his technology-backed business vision and acumen.

In July last year McKinsey & Company published an article “Five Questions Boards Should Ask IT in a Digital World.” It opens with a very strong statement: “Historically, boards have has a hard time assessing and discussing information-technology spending and its capabilities. They associate IT with endless reviews of mammoth, yearlong projects or ‘complex’ explanations by the CIO of ever-changing technologies and system requirements.” What does it indicate? Even the article in HBR expresses the same tone. “CEOs and boards still generally view technology as a cost.” Although more new age companies are realizing the power of technology as their key strength/differentiator, yet most boards still give a CIO or a CISO less than 5 minutes of hearing. If technology is that strategic and that important, why can’t a CIO be heard for a longer time or even be admitted in the board?

In a paper The Board and the CIO authored by David Smith, Chief Executive, Global Futures and Foresights and Edited by Nathaneil Suda, Consulting Director, Advanced 365, the first chapter titled: “Why technology changes board requirements and role” gives an interested perspective. The author quoting a Spencer Stuart report, says that some 20 percent of boards are now actively looking for directors who have technology expertise. Some boards are also considering their own technology boot camp training sessions, giving them a chance to become familiar with the core issues. “But the CIO remains as the person who understands the company’s business processes better than anyone – a perspective that the board has to reorganize to incorporate,” writes the author.

But does every CIO enjoy this kind of reputation that s/he is considered a natural choice as a board member? We all know the complex board formations and the roles each member plays in the growth of the company. What type of CIO (I am being very straightforward on the profile) is eligible to be part of a company’s board? This brings us to the fundamental question that I raised above: What type of CIO adds value/will add value to the board?

The reason why not many CIOs have been admitted to company boards could be their inability to have the level of business acumen required. In a 2014 National Association of Corporate Directors (NACD) conducted a survey with 1,019 board members at U.S. based public companies. In the survey 35 percent respondents said they are unsatisfied with the ‘quantity of technology information’ they get, and 27 percent are unsatisfied with its ‘quality’.

Does this point towards the fact that CIOs, because of their vast technology and limited business exposure, can’t place technology beyond a cost center? Does it mean that CIOs, because of their inabilities, are unable to seek appreciation for the technology’s role in a company’s transformation or in de-risking the company from many governance and cyber issues? What type of a CIO is needed to change this perception that technology is not a cost center any more?

A CIO needs to work on certain aspects to not only to gain more visibility but also be accepted as a board member.

  • Establish a direct correlation between technology and business enablement.
  • The technology projects should not be initiated and inaugurated by IT anymore. It is the business that should tell the CEO how valuable the IT project is or was for them in attaining remarkable business outcomes.
  • As a CIO stop cribbing that businesses need technology as of yesterday. It’s the age of dynamism. Neither Boards nor business appreciate delays or resistance. Move fast, implement fast and innovate fast. 
  • If you are a visionary, initiate IT-driven business projects and be vocal in the boardroom, whenever you get time. Remember one thing: it’s the quality of information that matters not the quantity.

Many CIOs, whom I observe closely, are great technology implementers. Many others are great strategists. But only a handful is great at story telling and that’s what makes takes them to the boardroom. Mastering this art isn’t that difficult.

In a white paper “CIO BRIEF: IT and the Board of Directors” published by Queens School of BusinessMichael Foulkes, member, National Leadership Council and former executive TD Bank Group underlines the fact that there has been a steady increase of interest in IT by boards of directors.

Michael identified three ways CIOs can get invited to meet the board:

  • Define your IT strategy: Boards are interested in proposed changes, such as new third-party relationships, big investments such as an ERP, outsourcing, and changes in the IT operating model.
  • Define your IT risk using a framework and/or maturity model: “A CEO’s nightmare is when a board member calls about something they’ve read in the paper. CIOs can proactively develop a baseline risk profile and take the board through it.
  • Describe your M&A readiness: IT brings significant project management capabilities to an organization that can be utilized in M&A work.

“It is important for CIOs to calibrate how they speak to the Board. You can kill your relationship if you speak too technically,” he says.

Having said that, I still feel the real CIO brings the strength and the acumen to add value to the board. In can start with getting more face time with the board and eventually reach to the stage where the board accept CIO as its key component.  

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Rahul Neel Mani

Rahul Neel Mani is the Co-founder and Editor of Grey Head Media. Rahul has nearly 20 years of experience in ...

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