Corporate Boards in All Industries Increasingly Turn Focus to Tech Strategy

Tech strategy? Seems a reasonable enough idea. Until placed in its historical context.

Because corporations used to have an electricity strategy and a telephone strategy and an automotive strategy. Until, of course, it became apparent that these innovations were means to an end, which was basically about how to sell more stuff to customers.

As wondrous as technology has become and as smitten as we may be by its possibilities, it is, still, a means to an end. At least if you are in business and need to make a profit.

So to the extent that there is a discussion about strategy, it should be about how to accelerate the convergence between tech and whatever it was you were doing before. Because there should be no difference whatsoever between tech and the rest of the enterprise. Assuming, these days, that there is a 'rest of the enterprise' left to worry about. So if you don't make that convergence happen really fast, someone else who has figured it out will be doing it to you. JL

Kim Nash reports in the Wall Street Journal:

40% of board members say they don't get enough material about their companies' technology strategies.
Corporate boards, waking up to headlines about major security breaches, are asking more pointed questions about company technology strategies and vulnerabilities.
While chief information officers have had to step up their games when presenting to the board, providing specifics about risks, projects, personnel and costs, the new focus has thus far generated relatively few board-level technology committees capable of better tech oversight.
But even without a formal committee, chief information officers will be interacting more with their boards as directors become more involved in technology strategizing.
About 27% of board members are dissatisfied with the quality of the material they see about their companies’ technology strategies, and 40% say they don’t get enough, according to a survey of 1,013 public-company directors by the National Association of Corporate Directors.
FedEx Corp. is one of the relatively few boards with a committee dedicated to technology. CIO Rob Carter met with the company’s Information Technology Oversight Committee six times in 2014. He also had less formal conversations with committee members throughout the year. Denise Wood, FedEx’s chief information security officer, also attended every meeting, Mr. Carter said. They discussed current security events in the logistics and delivery industry, he said, “as well as anything going on inside our infrastructure.”

FedEx board members typically receive a dashboard on their iPads that includes metrics about how much of the time the system is operating properly, IT spending, staffing levels and milestones for key projects that are under way. “They’re not counting that stuff but are interested in trends,” including digital interactions with customers, Mr. Carter said.
Generally, tech committees look at IT in terms of both risks and rewards. They strategize with corporate leaders about liabilities, such as security and compliance problems, as well as how to apply technology proactively to gain competitive advantages.
Just over 5% of public companies have such committees, but the numbers are increasing. For example, First Horizon National Corp., a mid-sized bank in Tennessee where Mr. Carter is a director, is forming one, he said.
At some companies, the CIO has to educate directors who lack technology prowess, said Twila Day, a managing director at Alvarez & Marsal, a professional-services firm. Many boards “don’t have people who are technology literate. Even when a CIO comes to give a presentation, they don’t know what questions to ask,” said Ms. Day, a former CIO who advises large companies on tech issues.
Companies have traditionally sought executives, including former CFOs and CEOs, with knowledge of finance or a particular industry, such as retail or manufacturing.
But now directors with technology expertise are in demand. Wal-Mart Stores Inc., for example, added Instagram LLC co-founder and CEO Kevin Systrom last year and Yahoo Inc. CEO Marissa Mayer in 2012. Wal-Mart declined requests for an interview.
To elevate the level of IT discussion in board meetings, a CIO might consider forming a relationship with a tech-savvy director to better understand the kind of information the board needs to hear, Ms. Day advised. “Use that individual as an advocate in board meetings,” she added.