Technology deficit in the boardroom is impacting enterprise investment and digital transformation, said Deloitte recently when releasing results of a survey of 500 directors and C-suite executives.
Technology deficit, defined as the lack of technology strategy and experience in the boardroom, exists though organisations today operate in an increasingly competitive and digital world, the firm pointed out.
- Organisations are looking for stronger board engagement in their technology strategy. However, fewer than half of executives and board members surveyed believe their board is providing enough oversight of technology matters.
- A similar number of executives (44%) say that their board directors lack the knowledge they need to provide effective stewardship in this crucial area.
- There are several challenges to board oversight of digital, cyber, and new technologies including: an over-reliance on management, deficits in tech fluency, vague tech governance structures, poorly defined management information, and unclear links between technology and strategy.
A competitive disadvantage
The board’s lack of experience could put investment at risk, and ultimately lead to a competitive disadvantage, Deloitte warned.
Nearly half of respondents (49%) say their organisation isn’t investing enough in technology to meet the key strategic objectives of outpacing the competition and addressing opportunities and risks, the firm said.
In fact, C-suite respondents were seven percentage points more likely than directors to say their organisation needs to step up investment, the firm added.
“Framing tech investments as business investments is vital to securing a competitive advantage and capturing more market share,” adds Lillie. “However, demonstrating a causal relationship between these investments and growth requires boards to first establish good measurement criteria and be able to clearly articulate the value that technological advancements can bring—for the entire organization.”
Opportunities to increase technology engagement
Despite the board’s technology deficit, respondents offered productive next steps to become more effective stewards of digital, cyber, and new technologies, Deloitte noted.
Survey results indicate that 66% of directors, along with 61% of executives, recommended educating board members on the latest technology trends.
A similar subset of respondents recommended developing a more holistic plan to address technology and its link to strategy at the board table—prioritising technology as an ongoing topic of conversation, Deloitte added.
What C-suite and board should do
Directors should assess whether, and to what extent, proficiency and stewardship gaps may exist on their boards, said Dan Konigsburg, leader of Deloitte’s Global Boardroom Program.
“While management should be thinking proactively about the relevance of adopting new technologies, board members can play an important role in the decision-making by exploring the ‘what-ifs,’ and envisioning future possibilities,” Rich Nanda, Principal at Deloitte Consulting LLP advised.
“Together, C-Suite and boardroom executives can complement one another to drive a technology-driven strategy that is both effective in the short-term and delivers outperformance in the long-term,” Nanda added.