Why All Boards Need a Technology Expert 67
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.
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*blink*
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The problem will easily be fixed by putting more chicks on boards.
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Consider yourself lucky if they don't outsource the whole operation to "Bob" in India (or just start putting everything "in the cloud" under the mistaken assumption that this automatically makes it secure).
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Why limit the position to an Information Technology expert? For example, if the company designs or manufactures hardware, why not have a "hardware expert" on the board?
My company's Board is stacked with cronies as they usually are. Usually pure "business" people with little technology background although we're one of the largest computer manufacturers. Their unsuccessful selection of 4 "business type" CEOs has been disastrous and will continue to be until the Board is cleaned up..
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Boards don't understand much of anything usually, except finance. As far as technology goes, IT is at the bottom of the list of things that they should know about with technology. I'd be happy if the boards understood what the companies actually produced or supplied.
Banks' ace in the hole: Legislators, not tech. (Score:5, Interesting)
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.
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The governments must bail them out.
The gov'ts *must bail out the banks who are in debt to the federel riserve. Now to do that the gov't must borrow from the feral resivour to bail out the TBTFs which introduces the need for quantamtative easying, which reduces the value of the tax dollars and the capacity of the government to pay back the money that they loaned from the fr, to give to the banks, so that they can pay back the FR. Isn't the FuR a p
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Frederick Lewis Allen
wrong quest (Score:5, Insightful)
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....
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He said "bring the best technology to their business" Not to the masses.
Using your CNC machine example, did you choose the most expensive CNC machine with the flashiest brochure or did you research and find the one at the best cost that would do the job you needed it to do?
Your CNC machine is integral to your guitar business. Without it you can not make guitars. That makes your business dependent on it, not only working, but being reliable and stable. Making a bad purchasing decision on the CNC machine coul
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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.
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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
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1) What are you talking about?
2)My business doesn't work without the CNC machine, because that makes my product. But the guy in charge of the business (which is my business partner, I'm a small business) doesn't know anything about CNC machines. He doesn't need to. He needs to make relationships with stores and move that product.
I'm not going to say it's not valuable for the suits to know the tech. I will say that we all have our jobs. Technology enables the business, it ISN'T the business, especially w
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But boards are not only at financial institutions. At a technology company it would help if the board understood technology. At a guitar making company, it would help if the board understood guitars.
But IT is just a side issue. It's low down on the things that a board needs to know about. Maybe the CEO needs to know about IT but not necessarily the board. Of course I suspect every department wishes they were better represented on the board.
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I'd be happy if IT themselves started having a quest to bring the best technology to their department.
This one thing is unlike the other (Score:4, Insightful)
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 (Score:5, Insightful)
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.
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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.
How odd, in a corporate world, obsessed with secrecy, one that has workers sign documents that they won't reveal anything, that they won't compete, very secure, very hush hush - we must protect our trade secrets
Then they simply give everything away via the cloud.
This argues to the OP, the idea of there needs to be someone in the decision process that is technically savvy, that isn't there just to rubber stamp the "cost saving" to be had by trying to implement the too good to be true promises made by sna
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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
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Boards themselves are elected by the shareholders. That in and of itself is probably enough to guarantee that a board member is not a techie. The IT expert is probably going to be hired on person - who may conflict with the CTO...
In this day and age, when the folks at the top can get a substantial reward for figuring out ways to fire as many people as possible, and the employee is enemy number one......
And we present to you......... the cloud.
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For the boards, they generally don't make decisions about how to run the company. They're there to keep the CEO in check and make sure the financials are ok and get a return on investment. If you want someone technically savvy that makes big decisions then that needs to be at the C-level.
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In a lot of ways, IT sets itself up to be outsourced. I have seen a trend where they seem to retreat into their own group, not get involved in what the company does elsewhere, hire people based on certificates and the ability to be interchangeable, etc. So they sometimes appear to be just like an outsourced firm except that they sit in the building. If they want to appear indispensible and worth the extra money, then they should be making efforts to attain that appearance.
Having one on the board doesn't change much. (Score:2)
About a decade ago banks noticed that computer security becomes an issue (they are a clever bunch, after only losing a few billions they noticed that people want to steal money from them). So most, if not all, banks today have a position for a CISO in their C-Level portfolio.
The next step would probably be to actually also give him some kind of power to install and execute security processes. That's probably going to take another decade.
Why would you want to get in early in this fight? Wait for them to actu
Yeaah ! 9 vs 1 (Score:1)
Yeaah ! 9 vs 1 sure he will survive against technical stupidity...
PS: I stepped down from this kind of position
Expert Plumbers and Carpenters on the Board (Score:4, Insightful)
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.
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IT is one thing. Technology is another.
If a board thinks that technology and magic are the same thing - a natural error to make when Clarke's Law comes truer daily - then the board is likely to make unrealistic decisions based on the idea that all problems can be solved by waving a wand.
Or, as they say to the people who actually have to realize these decisions: "It's Simple! All You Have To Do Is..."
Re: Expert Plumbers and Carpenters on the Board (Score:2)
Sadly true, as much as it shouldn't be. I've heard people in our department described as "internet janitors". When I wouldn't bend on a security policy to a PR exec, they pulled the "I'm so important, no wonder you only work in IT" schtick. I somehow refrained from responding "I guess since you're too stupid to hold a real job, you have to have a job manipulating people instead."
Because it's not relevant. (Score:3)
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.
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The above is a perfect example of why the company I am working for is running there financials on servers built in 1993.
Take 5x the effort to manage.
Moving parts are wearing out and dieing.
When they break we order parts from ebay and hope they work.
It is getting impossible and expensive to find someone who knows how to manage and work with the ancient technology.
There is no maintenance contracts because the equipment is so old that the contract cost every month is more than the replacement cost.
But it still
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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.
That's true, but, it doesn't help that IT vendors are always pushing customers into new gear. These days, it seems servers and disk arrays reach End of Life sooner than need be. We've still got some old Dell servers that were EOL 8 years ago, and they're still kicking.. but fortunately, nothing critical. For the critical info, we're forced into tech renewal.
Everything today is some kind of a race; we need it now, move forward, keep up, get ahead etc...
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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
Nonsense, we board members use the googles! (Score:3)
Hraumph!
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It's a blessing. And a curse.
We have support groups about this. But generally the meetings fall apart because we all argue about which of us is the smartest person in the room.