Technology is transforming every aspect of business, from operations to customer experience. To stay ahead of the competition and seize new opportunities, companies need to have a clear vision and strategy for digital transformation. But how can boards of directors ensure that they are providing effective oversight and guidance for their companies’ technology initiatives?
According to a recent article by Forbes, there are five principles that can help boards become more tech-savvy and lead tech-savvy companies. These principles are:
Understand the business impact of technology
Boards should not view technology as a separate domain, but as an integral part of the business. Technology can enable innovation, efficiency, growth, and resilience, but it can also pose risks and challenges. Boards should understand how technology affects the company’s value proposition, competitive advantage, and stakeholder expectations. They should also monitor the performance and return on investment of technology projects and initiatives.
Engage with management and external experts
Boards should have regular and constructive dialogue with management and external experts on technology matters. They should ask probing questions, challenge assumptions, and provide feedback and support. Boards should also leverage their own networks and connections to access diverse and independent perspectives on technology trends, opportunities, and threats.
Foster a culture of learning and experimentation
Boards should encourage a culture of learning and experimentation within the company, where technology is seen as a source of creativity and innovation. Boards should support management in creating a vision and roadmap for digital transformation, and in fostering a mindset of agility and adaptability. Boards should also promote a culture of ethical and responsible use of technology, where data privacy, security, and governance are prioritized.
Recruit and develop tech-savvy talent
Boards should ensure that the company has the right talent and skills to execute its technology strategy. Boards should assess the current and future technology needs of the company, and identify and address any gaps or shortages. Boards should also recruit and develop tech-savvy board members, who can bring relevant expertise, experience, and insights to the boardroom.
Embrace change and uncertainty
Boards should embrace change and uncertainty as inevitable and unavoidable in the digital age. Technology is constantly evolving and disrupting, and boards should be prepared to adapt and respond to changing circumstances. Boards should also anticipate and mitigate the potential risks and challenges that technology can bring, such as cyberattacks, regulatory changes, and social and environmental impacts.
By following these five principles, boards can become more tech-savvy and lead tech-savvy companies. Technology can be a powerful enabler of business success, but it requires strategic oversight and guidance from the board. Boards that are proactive, engaged, and informed can help their companies thrive in the digital era.
