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Technology Officers

CIOs Can Avoid Being DOA in the Boardroom

  • September 2012

CIOs Can Avoid Being DOA in the Boardroom

CIOs need to prove they can bring more than narrow technology expertise to the table if they want to land a seat in the boardroom.

With the adoption of mobile, Big Data, analytics and the cloud holding incalculable implications for business, many corporate boards now feel an urgent need to bring in sophisticated technology expertise. More than half the directors surveyed by the National Association of Corporate Directors say they do not currently receive enough information to perform their IT oversight duties, and more than one-fifth of S&P boards say they are now specifically seeking a director who is expert in technology.

An accomplished CIO seems a logical choice to fill this need, but CIOs must significantly hone their message and change common perceptions that their job responsibility does not extend to making strategic decisions if they hope to be appointed to a board. Above all, boards want assurance that an outside CIO will bring much more than narrow technology expertise to the table. In fact, any CIO who can’t also demonstrate significant operational experience will likely be dead on arrival in the boardroom.

Board Mathematics

Here’s why. Best-in-class boards (the kind smart CIOs aspire to join) craft sophisticated succession plans, with very good reason. On the typical board, there are just 10 seats. One is customarily filled by the company’s CEO, another by the CFO. The remainder must be thoughtfully allocated to meet a range of critical needs: audit chair, compensation expert, international expert, and so on. Since there are more critical needs than board seats, shrewd boards search for double or triple threats — directors who will bring multiple strengths. To fill their technology void, many boards may seek a CEO with technical and operational leadership credentials. Boards have long valued CEOs’ overarching experience. Active and retired CEOs, Chairmen, and COOs still account for 45% of new recruits to public company boards.

CIO Identity

In contrast, many CIOs present themselves in narrow terms, touting their technology expertise but failing to articulate their broader experience and strengths. This reinforces the perception among boards that CIOs are tactical fixers rather than strategic leaders. Boards can always secure narrow-gauge IT expertise by engaging technology consultants or hiring technologists into management. That means CIOs who aspire to be directors must offer more. It might be an extraordinary skill matching technologies to customer needs or a track record of applying new technology to deliver transformational, companywide breakthroughs in product/service evolution or operational efficiency. To be viable board candidates, CIOs must demonstrate special foresight into the implications and possibilities of technology, not just firm command of the technology that currently exists.

Limited Talent Pool

Clearly, the role of the CIO is evolving away from the back office efficiency expert still envisioned by many boards, to the dynamic leader who leverages technology to create or transform entire industries. Yet truly strategic CIOs remain the exception, not the rule. At present, most CIOs who would be viewed as board-worthy work in companies where information technology is the product or service (e.g. tech companies) or where it is a game-changing strategic enabler (e.g., financial services, digital, media). CIOs in such companies have experience operating at the nexus of technology and business strategy. This is important because, as a rule, executives must have personally made big decisions to be seen as qualified for board service. The reality is, many more CIOs have consultative experience having presented options to higher ups, versus having themselves made strategically vital decisions.

Compelling Match

Technology’s growing complexity and importance make what CIOs know and what boards need a compelling match. But to make the match work, both sides must think outside the box.

For boards, that means considering director candidates who may lack board experience and are less experienced than the typical CEO, yet demonstrate operational maturity and have a track record of making effective strategic choices. The reward for making this tradeoff is a much larger pool of potential directors who can help the company strategically leverage and monetize emerging technologies.

CIOs can prepare to address boards’ valid concerns, starting with their availability and readiness for board service. They must be certain their own CEO will support them serving on an outside board and that they can devote the time and energy required of a director. CIOs must be forthright in addressing any potential conflicts of interest and be able to show that they understand the responsibilities of board membership. CIOs whose understanding of how boards actually function is weak must take the time to learn. CIOs must definitely study the boards they aspire to join. As important, they should realistically assess their strategic achievements above and beyond managing their own functions. CIOs unsure that their resume will impress a board should seek more consequential responsibilities. CIOs must take charge of making themselves compelling board candidates.

Will boards turn to CIOs to meet their need for more technological expertise? Some already have. Many more will, but only as CIOs demonstrate and compellingly articulate that they can bring boards true strategic value and insights.

This article was first published on The Wall Street Journal and is republished on this website with kind permission of the magazine.

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