April 13, 2018 • By Laurie, McLaughlin, UCI Paul Merage School of Business
With the hundreds of issues that corporate board members must understand, study and advise upon, there are some important topics that may get less attention than others, including a company’s digital and technology strategies.
“When we’re talking about technology… related to enterprise goals and so on, that becomes harder, because people really don’t understand it, and people don’t like to talk about what they don’t understand,” said Kathy Misunas, board director for Tech Data Corporation and Boingo Wireless. Misunas was among the three panelists participating in the “Digital Capabilities at the Top: Does your Business Have Them?” discussion at the Center for Digital Transformation’s 2018 Road to Reinvention conference.
Moderated by Merage School Professor of Strategy Margarethe Wiersema, the panel explored the ways board members should focus on digital technologies within the companies they serve.
Lack of sufficient IT or digital expertise is indeed a leading concern among members of corporate boards, said panelist Dean Yoost, board director of MUFG Union Bank and Pacific Life Insurance Company. He suggested four approaches for a board to attack the knowledge deficit: recruit a director with IT experience; designate a director that champions IT issues at the committee or board level; bring in outside advisors; and form a technology committee.
“My own view out of those four alternatives is that it’s probably a combination approach, and it depends on the company’s resources,” said Yoost.
Navigating IT funding and priorities is particularly careful work for companies that have a legacy business to also run. With large companies that have done things a certain way for a long time, said panelist Susan Swenson, board director for First Responders Network Authority and Harmonic, “I do think you have to carve off an organization that focuses on [digital strategy], because it won’t get done otherwise. In this way, … the board can understand where the investments are being made.” But it takes discipline, she added. “It’s tougher in a legacy company than it is in a start-up. That’s just the way it is, but it can be done – I’ve seen it.”
Swenson emphasized that board members must be authentically engaged with senior leadership and actively acquire first-hand knowledge. In discussing cybersecurity, Misunas also underscored the need for hands-on action: Both of the boards on which she serves have cybersecurity committees, which ensure a focus on the issue, establish a board relationship with the employees who attend to cybersecurity, and the committees’ reports engage the greater board in the conversation.
“It is looking in the eye of somebody … and they are implementing the tools that they said that they were going to,” said Misunas, “Whether it’s software, … or hiring outside people, or getting the right staffing and equipment, you can monitor all of these things.”