Egon Zehnder
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Digital expertise comes in many forms

Proceed with caution, and think beyond the board.

There is a growing consensus among clients and observers in the corporate governance world that boards are lacking the digital and technological expertise needed to keep pace in today’s ever-changing cyber-connected world. Current headlines reinforce the “demand spotlight” placed on the digital darlings appointed to leading board positions and highlight the ever-dwindling supply of top-tier digital talent. Boards are reacting with overeagerness to recruit and seat digital directors for fear of being left behind.

But before jumping on the digital bandwagon, ask a fundamental question: Do you really need to add a new director with digital skills to your board? You may open up a host of creative solutions to your digital dilemma if you think beyond the board, first carefully assessing what digital-related skills you actually need.

If you decide to recruit a director with digital expertise to fill one of your limited board seats, proceed with caution and make sure you are doing so for the right reasons. While many boards have added excellent directors with crucial digital skills as part of a well-thought-out board assessment and recruiting process, others seem drawn merely to recruit the director du jour. The latter approach is no panacea for what the board may be missing and can, in fact, create unanticipated complications for the board.

Think it through and consider your options. One excellent alternative and growing trend is to form a digital advisory board. This solution provides the board access to digital expertise without the complexities of creating a new director position or filling an open slot (possibly better reserved for broader operating or financial expertise). An advisory board provides access to high-caliber talent, allowing these specialized executives the opportunity to contribute and enhance their own experience without jeopardizing their career climb by making the commitment serving as a director requires. Leading companies at the head of the digital advisory board curve include Procter & Gamble, Unilever, L’Oreal, Pozen, McGraw Hill, and Mandalay, to name a few.

With many of the digital superstars already committed, those boards that wish to recruit digital expertise will have to be more discerning and insightful about exactly what they require. Consider the following to ensure you recruit the right talent for the right role:

1. First, define what you need.

Are you seeking technological expertise or perhaps product or marketing savvy? The answers will vary widely by company and strategy, and boards must carefully articulate what is missing and what they require. “Digital” is a vague, catchall word that may mean different things to different people. Define what it means to your company: Does digital already play a key role in the company’s strategy or is it contemplated as part of a vision to transform the business? Will you require digital expertise to enhance operations or the customer experience? Are you planning on wading into the social media stream, perhaps for the first time?

2. Now determine where you need it.

Do you need to add digital talent to the management team or to the board? Digital insights are important on the board, but don’t rely on one director to solve problems that go deeper and need to be addressed by management. And don’t confuse strategic problems with governance. Never assume that a digital director will, or should, be there tore-jigger the strategy of a traditional organization. Viewing the digital leader as a “guru” sets up unrealistic expectations for success. Directors should understand why digital expertise is crucial to the company and then work effectively alongside any digital leader who joins the board or advisory team. Remember, the experience has to provide value for both the board and any individuals recruited.

3. Ensure that any new director has the time to commit to being a fully engaged contributor.

A marquee name, even that of a digital superstar, will mean little if that director is too distracted by a demanding, high-powered day job to provide needed expertise to the board. An advisory board may provide a more appealing opportunity for a senior executive still building a career, where less time, perhaps merely several days a year, and fewer responsibilities are required.

4. Be careful what you wish for.

A sterling resume as a digital executive is no guarantee that the individual will make an excellent director. In addition to possessing the required time and commitment, any director must be a good cultural fit for the rest of the board team. Many digital directors are new to board service and will likely require more time and training before they can contribute fully in the boardroom. And once on the board, it is very difficult to make changes, so choose wisely.

Examine the board’s motivations if you are considering adding a digital director. What is really at the core of the decision? Do your homework and don’t assume that just because a particular solution has worked for another board that it will work for yours. Define precisely what it is the board needs in terms of digital expertise and then ensure the solution aligns with your board’s unique history, culture, and requirements. A digital advisory board may be the optimal solution and, far from a compromise, may enable your board to gain access to the expertise and guidance of several digital executives as opposed to merely one digital perspective.

This article was first published in Directors & Boards, First Quarter 2013 and is republished on this website with kind permission of the magazine.

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