Why All Boards Need a Technology Expert

New submitter ebonyygraham writes with an article at the Harvard Business Review about the dearth of IT savvy professionals in the boardroom. A few months ago I decided to look into the professional experience of non-executive directors at the major banks listed in Britain. Like almost every other major industry today, banking relies on hugely complex, enormously expensive technology. So I was curious as to whether the individuals charged with corporate governance would have any more than a layman's knowledge of IT. I discovered that only one bank had a board member with some direct experience in technology and in that case it was as a sales executive. I'm afraid this is typical not just in banking but across most major industries. Technology is the most important agent of change today; hardly any industry is immune to both its value-creating and disruptive potential. Yet I perceive a large gap between the direct experience of non-executive directors and the experience required to challenge and support chairmen and CEOs in their quest to bring the best technology to their business.

Comments

Banks' ace in the hole: Legislators, not tech.

[140Mandak262Jamuna]

Banks used to make money by lending money to other risk takers, while the bank itself preferred the low risk-sure return interest income. Then in USA they removed the barrier between banking and investing. So the banks started investing other people's money, going for higher return for higher risk business. Then they realized, they have the entire civilization in their control, their high risk bets are so thoroughly mingled with world financial systems, they will not go bankrupt no matter what they do. The governments must bail them out. So now they are in a situation, "make high risk bets, keep the profits when they are good, pass on the losses to the society when they go bad". Morgan-Stanley into commodity trading, shipping the aluminium back and forth between two warehouses and somehow make money off that insane thing. At this point who needs technology? All they need are diabolical supervillains to imagine crazy schemes, lobbyists to make those schemes legal, and lawyers to implement those schemes.

At this point their stranglehold is on the governments and the financial systems. Not technology, not bond-trading. Others can innovate and might even be much better than the banks in assessing risk/reward ratio. But as long as the others have to eat their losses, the banks will come out ahead.

It is not a bug there is no techie in the board. It is by design. They need diabolical monsters from the comic book super villains in the board, not techies.