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.

wrong quest

[whistlingtony]

There is no "in their quest to bring the best technology to their business", because that's not their mission. They're there to make money. Even tech companies are there to make money. The technology rarely has anything to do with it. The coolest gizmo in the world won't make money without marketing and sales.

I use CNC machines in my side business of making guitars. My quest is to make money selling guitars. The CNC machine enables that, but it's not my quest to bring CNC machines to the masses. It's not even my quest to bring the latest guitar technology. Quite the opposite.

You're talking about BANKS, fer crying out loud....

Re:wrong quest

[BVis]

Two things:

1) You're comparing a group composed of humans to your CNC machine, as if they're both something to be bought and sold. Dehumanizing people rarely improves a situation.

2) Can you do your job without that CNC machine? No? There isn't a company in an industrialized nation in the world that can do its job without IT workers. They might try to, they might even last for a while, but eventually other less-stupid companies will eat their lunch while they're trying to figure out the fax machine.

Re:wrong quest

[drinkypoo]

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.

There is no "in their quest to bring the best technology to their business", because that's not their mission. They're there to make money. Even tech companies are there to make money. The technology rarely has anything to do with it. The coolest gizmo in the world won't make money without marketing and sales.

You're comparing a group composed of humans to your CNC machine, as if they're both something to be bought and sold. Dehumanizing people rarely improves a situation.

That's not what they are doing. If you read their comment as a response to the summary, which it appears to be, then they're pointing out that these businesses don't have a mission to bring technology to people, their mission is to make money. His mission is to make money, so he uses CNC machining. Not because he wants people to have CNC-machined guitars, but because he wants to make money. CNC-machined guitars might be higher-tech than non-CNC-machined guitars, but high-tech guitars aren't the mission.

Can you do your job without that CNC machine? No? There isn't a company in an industrialized nation in the world that can do its job without IT workers.

This is not about IT workers, at all. This is about boards (as in, of directors) being able to make intelligent decisions. They can't do that if they are ignorant, and if they fail to include someone who knows IT, then they remain ignorant. The article explicitly says not to rely on advisors, and kind of tries to explain why. When boards do not include someone who knows IT, and they try to engage in business which includes IT, they make ignorant decisions instead of intelligent ones.

Similarly, you can't make intelligent comments unless you read and understand at least the summary, if not the story.

This one thing is unlike the other

[rmdingler]

Unless the tech savvy corporate honcho is a founder of the company, it seems likely the person in the boardroom is a ladder-climbing, win at all costs personality type.

Perhaps this is not the skill set that makes for the best tech minds.

That, and there's a virulent belief that IT can simply be outsourced.

Re:This one thing is unlike the other

[BVis]

That, and there's a virulent belief that IT can simply be outsourced.

That's not so much a belief as a truth. You can outsource your IT, firms exist to do that. You will probably save money doing that, and that's all that matters to the suits. Nevermind that now it takes three weeks to get a problem fixed instead of same-day, and your workers get so fed up with the lousy service the outsourced IT provides that they just let problems continue without asking for them to be fixed. This hurts your business in lost productivity.

But, productivity is hard to measure. Dollars are not, and the outsourcing saves dollars. This makes it a perfect solution for the folks that can't turn on their computers without a cheat sheet.

Re:This one thing is unlike the other

[BVis]

I agree that there needs to be someone who is technical, but the truth on the ground is that most C-level execs regard IT as little more than overpaid janitors who break things all the time and make them change their passwords once in a while. The C-levels that I've worked with (multiple Fortune 500 companies) don't even know that there's anything to know about IT, past 1) IT costs money, 2) IT doesn't do anything that they understand, therefore it's not important, and 3) whenever anything in the building that runs on electricity breaks, you can take out your frustration on the IT guy that comes up to fix it and not have to worry about any consequences.

Expert Plumbers and Carpenters on the Board

[Anonymous Coward]

IT is a blue-collar job. It's a trade. I know it, you know it, and the CEOs and boards sure as fuck know it.

Programming, Systems administration, Networking, etc, etc, is about skills, knowledge, application, results. It's about what you know, what you can do and not who you know.

Professional corporate white collar jobs like banking, finanice, accounting, law, etc are about bullshitting your way ahead and networking. They're about failing upwards and above all hiding your incompetence behind layers of social and professional obfuscation.

No fucking way is a tradesman of any kind getting near a corporate boardroom, much less a critical thinking one. Our job as tech experts is to try and make the systems these people demand as least destructful as we can, and clean up the mess when the whole house of cards eventually does fall in. Like everyone else of course, we also get the privilege of paying for it.

Re:Expert Plumbers and Carpenters on the Board

[JaredOfEuropa]

IT is often called "plumbing": it just has to work. Working in IT might be a blueish-collar job, but technology strategy and security policies sure as fuck aren't. Having great toilets doesn't do much for the bottom line, and having crappy ones is not much of a risk. But having the right tech applied the right way can be a competitive advantage. And having the wrong tech poorly administered can kill your business

Because it's not relevant.

[oh_my_080980980]

Would you expect executives to understand their telecom systems or how the plumbing works? It's infrastructure. You have people that manage it and provide reports. That's how a corporation works. The fact that the author mentions storing medical information in the cloud shows how clueless he is and is pushing an agenda.

When someone says technology is old and needs to be replaced because it's old does not truly understand technology. Age does not mean something needs to be replaced. Whether or not it gets the job done properly and efficiently is the point. It's a waste of resources to simply by something new. This joker does not understand that and is probably the reason why companies over spend on technology and then make drastic cut backs because they over spent.

Re:Because it's not relevant.

[JaredOfEuropa]

If the telecom systems or the plumbing are critical to the business and provide a potential competitive advantage, then yes, I would expect management and the board to have at least some understanding of that infrastructure and how it is (or should be) managed, or (and this is what the article is getting at), have someone with a good understanding talking to to board or even sitting in it, so that they are well-informed and advised regarding matters of technology, by someone they know and take seriously.

If you treat technology as infrastructure, don't be surprised when other companies start eating your lunch.

Re:Because it's not relevant.

[blue9steel]

Would you expect executives to understand their telecom systems or how the plumbing works?

That depends on the corporation. At a telecom company there better darn well be someone on the board that understands telecom. If computers are integral to your business, which they aren't for all businesses, then it would be prudent to have someone who knows something.

For example, at a manufacturing company computers are just appliances despite their widespread use so not much advantage to having a tech savvy board member. At a distance education company however computers are business critical and a big capex item, having some expertise on the board would be a significant advantage.

Nonsense, we board members use the googles!

[NotDrWho]

Hraumph!

Re:Good luck with that

[Mr D from 63]

There are a shitload of technologies out there and nobody is an expert in all of them. Sure, there needs to be tech-saavy people in leadership, but having a tech "expert" on the board is not always required. The board is not an island, they use input from experts outside the board all the time.