In the digital age, technological innovations have become a cornerstone of business operations, and companies are increasingly relying on advanced digital strategies to stay competitive. As tech-driven disruptions and cyber threats reshape industries at an unprecedented pace, the need for technical expertise on corporate boards has never been more pronounced. Meanwhile, with artificial intelligence (AI), blockchain, and digital identity technologies emerging as transformative forces, the importance of technologists on boards becomes paramount in navigating the ever-changing technological landscape effectively.
A 2022 survey by Heidrick and Struggles revealed promising trends, with an increase in cybersecurity expertise and relevant digital experience among new board members in F500 companies. Cybersecurity expertise among new board members rose to 17%, up from a mere 8% in the previous year, while 41% had digital or social media experience. However, this positive shift leaves many boards still lacking critical technical skills to address the rapid evolution of AI, blockchain, and digital identity technologies.
The Challenges of Advancing Technology
The speed at which technology is advancing poses challenges for companies across all sectors. AI, with its potential to revolutionize decision-making and automate processes, requires expert guidance to ensure ethical and responsible integration. Blockchain, the driving force behind decentralized finance and secure data management, demands a deep understanding of its intricacies to leverage its full potential. Moreover, digital identity technologies raise complex questions about data privacy and security, necessitating informed decision-making to protect both businesses and their customers.
With the Blockchain and AI Market projected to grow to USD 980.70 Million by 2030, at a CAGR of 24.06% , the opportunity is too big to be missed. Without a board that understands the benefits and risks of the new technologies, a company can be left behind. The indispensable value of technologists on boards has never been more apparent, especially with Generative AI dominating numerous discussions today.
Many companies are actively experimenting with Generative AI’s application throughout the entire development lifecycle, encompassing analysis, design, development, testing, and deployment. Jeff Smith, Board Member for ANZ and Sonrai Security, emphasizes the new realities that today’s boards face, stating, “As the digital realm converges with cybersecurity, digital transformation, AI, and global perspectives, boards must cultivate a profound understanding of these technologies to successfully navigate the dynamic digital landscape worldwide.” Embracing the expertise of technologists on boards becomes paramount as businesses strive to remain competitive and adaptive in this rapidly changing technological landscape.
In addition, cybersecurity experience is important but lacking. A February 2023 piece by Forbes noted, “Only 51% of Fortune 100 companies have a director on their boards with relevant cybersecurity experience. There is a total shortage of 2,724 directors with cybersecurity expertise across all Russell 3000 companies.”
As the Web3 industry grows, the needs for cybersecurity and Web3 expertise intersect. While Web3 brings a host of opportunities, it also brings unique security risks and new points of attack.
Cohesity CEO & President, as well as Board Member of PhilipsPHG and Snyk, Sanjay Poonen commented on the need for more cybersecurity skills on boards, noting that “In our increasingly digital environment, it has become crucial for leaders to be tech-savvy if they want to keep up with the lightning-fast evolution of technology. These skills are invaluable not only to IT engineers but also to people who are responsible for coming up with global strategies that companies employ — which must always take cybersecurity and cyber resilience into account.”
The Examples: Salvation Army, World Wildlife Fund, Zoom, And Altair
In today’s ever-evolving digital landscape, the need for technologists on corporate boards has never been more evident. Telecom4Good sheds light on alarming instances of cyberattacks targeting prominent organizations like the Salvation Army and the World Wildlife Fund.
To fortify defenses, these boards must leverage the expertise of technologists who can advise on crucial measures for cybersecurity. A modern board agenda needs to ensure organizations remain protected against cyberattacks. For example, Zoom, with dedicated cybersecurity committees led by seasoned technologists, demonstrates the immense value of having technologists guide the strategic direction.
Altair, a computational science company with deep expertise in AI, digital twins, simulation, and high-performance computing for which I am a board member, has also seen the value of technologists on its board. Altair is among the top IPO success stories of the past 10 years. Altair’s CEO, Jim Scapa, has always prioritized having strong technologists on his board. “Long gone are the times when ‘business people’ and ‘technical people’ lived in their own different worlds,” he noted. “Today, technology is not just an element of a business for many companies — it ‘is’ the business. As these boundaries increasingly evaporate, the role and importance of visionary technologists on company boards grows proportionally.”
The SEC Proposed Change
The proposed SEC rule change on Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure by Public Companies further emphasizes the need for technologists on boards. The amendments seek to enhance and standardize cybersecurity disclosures, requiring public companies to have board members with cybersecurity expertise. This forward-thinking approach acknowledges the necessity of adapting to the fast-paced technology landscape to safeguard businesses and investors alike.
Private companies are expected to follow suit by adopting leading practices and incorporating technologists on their boards. As AI, blockchain, and digital identity technologies become ever more pervasive, private companies must ensure they are prepared to tackle cyber threats and technology failures while leveraging emerging opportunities.
Technologists on the Board
To recruit a board-level technologist effectively, a board should consider engaging a recruiter who comprehends the nexus between governance, leadership, and adding diverse skills. Before starting the recruitment process, the board must review its skill set matrix, encompassing functional roles, technical expertise, industry knowledge, and geographic diversity, to identify any gaps and align with short- and long-term strategies.
The three key things to look to supplement corporate boards or to be ready for that board position are:
1. Strengthening Alignment of Tech Investments with Strategic Priorities: The board plays a pivotal role in ensuring that technology investments and deployment align closely with the company’s long-term strategic priorities. By proactively evaluating tech initiatives and their direct contribution to the overall business objectives, the board can foster a culture of informed decision-making, mitigating risks, and capitalizing on opportunities for continuous improvement and growth. Regular discussions on technology strategy and its alignment with the company’s vision will empower the board to lead the organization confidently into a tech-enabled future.
2. Engaging the Entire Board in Technology Discussions: Evaluate how and when technology is discussed at the board level. Consider if technology discussions primarily occur within committees and ensure the full board actively engages in these conversations to make informed decisions.
3. Enhancing Technology Expertise: Assess the level of technology experience on the board. The board should prioritize enhancing technology expertise to navigate the next generation of the internet, including AI, Generative AI, Blockchain, and web3, and proactively address cybersecurity requirements by recruiting directors with a deep understanding of cybersecurity measures and emerging cyber risks. By embracing these strategic imperatives, the board can confidently lead the organization into a tech-enabled future while safeguarding against evolving cyber threats.
Many of the board members I’ve interviewed emphasized the importance of recruiting candidates with diverse global experience. In today’s interconnected world, innovation is happening everywhere, and leaders with a global mindset possess the ability to identify and seize opportunities across borders. Their broad perspective and understanding of diverse markets and cultures can be a valuable asset in navigating the complexities of the global business landscape. By incorporating individuals with extensive global experience, boards can effectively foster innovation, drive growth, and ensure a successful and sustainable future for their organizations.
Rochelle Campbell, CEO of Leadership Elevated, a board recruitment and governance consultancy, emphasizes the power of a technologist on the board. Aspiring technologists seeking board seats should focus on showcasing the breadth and depth of their technical expertise while also elevating the conversation to demonstrate knowledge and strategy across an organization. They need to overcome stereotypes and drive positive outcomes in the boardroom.
“Finding a new board member with sufficient technical expertise requires a comprehensive approach,” she explained. “Essentially, candidates must have an understanding of both your organizational technical needs and the ability to fulfill their fiduciary duties through oversight of organizational strategy in a global economy. As such, companies should focus on finding a candidate who both understands the ‘under-the-hood’ specifics and can also offer the oversight to help lead boards through this transformational time.”
Technologists Are Essential
In an era of perpetual technological change, the role of technologists on boards becomes non-negotiable. Technological advancements are not only influencing strategy but also reshaping entire industries. Having board members with a deep understanding of AI, blockchain, and digital identity ensures companies remain agile, innovative, and prepared to harness the full potential of evolving technologies. As the digital landscape continues to evolve, the presence of technologists on boards becomes a strategic necessity for safeguarding businesses and driving success amidst rapid technological disruption.
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