CIOs Should Be Asking Questions In The Boardroom, Not Just Answering Them. Here Are 5 To Start With

A Gartner initiative that has seen nine UK CIOs appointed as non-executive directors (NEDs) on listed company boards, came earlier this month to New York in the form of a dinner attended by senior tech executives from Facebook, First Data, Disney, Bristol-Myers Squibb and Blackstone, among others.

Information and digital capabilities are changing the conversation about business value-creation, so Gartner Inc. sees widespread need for more CIOs and CTOs on senior company boards. That is, someone competent to thoroughly probe executive management on its technology strategy.

All strategy these days is at least partly technology strategy.

But, even now, after root-and-branch digital shakeups in most industries, technology is still viewed as an “operations issue” on many traditional boards. Something like a matter of good plumbing.

And if the board has any concerns, the plumber can be summoned to address them.

All fine and well it would seem. But the role of a company board is to ask probing questions of executive management to protect and increase shareholder value. Do board members, who are overwhelmingly CEOs, CFOs, bankers and accountants, know what to ask?

And can they tell if and when they have adequate answers?

Last year US Senators made themselves a public laughing stock in their failure to comprehend digital dynamics and social media analytics well enough to ask the right questions of Facebook’s Mark Zuckerberg.

Framing the CIO’s role as bringing questions to the boardroom, not just answers, Gartner analyst Mark Raskino in a recent research note proposes five that CIO NEDs are best-placed to ask:

1.    How will our vision for the digital future of our industry beat that of future competitors?

2.    Is management delivering to targets for digital revenue and profit growth?

3.    What percentage of customers is using our digitalized products and services?

4.    How are we accelerating the development of digital tech capabilities?

5.    Are our tech partners and providers the best strategic fit?

Behind these are second-order probes: “How is our industry, its products, services, business models, value chain and power brokers likely to change? Do we know who our future competitors may be? Is our timing right? Do we risk becoming dependent on a provider that may one day choose to disrupt our industry and compete with us?” And so on.

In posing these kinds of questions, the CIO NED can uncover executive management’s technology-related strategy business blind spots, and so enhance a company’s future-readiness and robustness to industry change.

Says Raskino, “Business models, operating models, customer value propositions, industry structures and daily business risk-reward trade-offs are all shifting.

“A company with a clear vision of the future is more likely to win by either setting the rules of the game or being quick to take advantage of an unfolding new industry landscape defined by other players.”

The CIO can catalyze a board to “look for gaps; reframe closed mindsets; provide external perspective; and point to potentially better options or directions.

 “Executive teams, no matter how effective at current operations, can often become myopic. A (CIO’s) big, well-aimed, simple question can disrupt such complacency,” he says.

But, before this can even begin to happen, there remains the non-trivial matter of achieving board appointment for a technologist in the first place.  

CIO or CTO NED board appointment is a needle that is hard to move in a boardroom culture dominated by finance and general management. To move it, Gartner’s formula is to invite board candidates with technology backgrounds to a series of dinners, also attended by major recruiting firms and board chairmen.

Lorenzo Larini, Senior Vice President Gartner Executive Programs, says, “Many CIOs and CTOs are also experienced business leaders, and some of them are definitely board-ready.

“The NED initiative gives tech executives exposure to the most significant executive search firms, and chairmen of public-company boards, and also develops their capabilities to increase their business impact when joining a senior board.

“We believe this platform will take our industry as a whole to the next level.”

At the New York dinner, Irene Chang Britt, experienced board chairman of major private and public companies such as Dunkin’ Brands, appealed to CIOs to translate their CV experience to present themselves more broadly in terms of business benefit, rather than technology capability.

In interview afterwards, she said, “Real world experience and expertise in technology is now critical at the boardroom table. Directors need to be able to ask insightful questions about digital disruption, seamless omnichannel opportunities, cyber security, etc., and also understand the answers.

“CIOs who think broadly and connect business imperatives with technological insight are a valuable addition to any forward-leaning board,” she said.

CIO board-candidate, Kevin Salvadori, Director Network Investments at Facebook said, “A forward thinking technology executive on the board is best positioned to probe that the business implications of technology are fully considered. 

“As well, many CIOs can provide a unique perspective enquiring about technology and security risk management, which is important for board audit and risk committees.”

Coming from a company that has made the board-tech transition, Dirk Marzluf, global head of technology & operations at Banco Santander, who was part of the Gartner Europe NED program, says, “Business models are changing rapidly and new technologies are driving this transition. It makes sense that tech executives are involved in strategic decisions within companies.

“Santander already has these profiles at board level, and an international advisory board which provides strategic advice to the Group, with a strong focus on innovation, digital transformation, cybersecurity and new technologies.”

But most big company boards are not there yet. Robin Roberts, senior advisor to Gartner, formerly senior technology partner of Egon Zehnder, has conducted research that analyzes the background of every board director of every NYSE 100, NASDAQ 100 and FTSE 350 company in 2017 (5,384 directors in total.)

Says Roberts, “Most boards have doubled and tripled-up on NEDs with CEO, CFO, banking, accounting and commercial backgrounds, while they still have nobody with technology experience.

“Given what is already here in terms of technology-driven business change, let alone what is coming, I’m amazed shareholders don’t hold board chairmen to account over this.”