Caldwell Partners recently analyzed the boards of 1,000 publicly held companies in the United States and Canada, and the executive search and recruitment company’s research yielded a result that surprised many. It turns out that despite the ever-increasing role of technology in corporate operations, few enterprises are acknowledging that standing technology committees and dedicated experts are not so much a luxury as a necessity of leadership in the modern age. After all, it is not a matter of if a company will face a cyber threat or major technological issue but when.
Specifically, Caldwell Partners’ research revealed that just 13 percent of the largest public companies across North America reported having a dedicated technology expert on their boards, while even fewer – only 4 percent – had a standing technology committee. Without a tech-focused presence, the motivation to talk about issues related to IT at the executive level tended to fall by the wayside. In fact, fewer than half (42 percent) of representatives from firms that participated in research conducted by PricewaterhouseCoopers said they had conversations about topics that fell under the IT umbrella more than once a year. Even more worrisome, of these discussions, only approximately one-quarter (28 percent) concerned how technology is expected to impact an industry down the road. A company’s level of preparedness – or their lack thereof – puts it at risk of being caught unaware by future developments, which could jeopardize reputation, performance and profitability.
Understanding the findings
So, why the aversion to creating standing technology committees and bringing dedicated experts into the fold? Are companies simply unaware of the rising importance of technology? Research conducted by PricewaterhouseCoopers revealed a marked discrepancy between CEOs’ and boards’ views on the topic, with more than eight in 10 (81 percent) of CEOs reporting that they ranked technology as a top priority, compared to just 42 percent of boards.
However, if statistics from International Data Corporation are anything to go by, boards won’t be able to bury their heads in the sand for long. The research, analysis and advisory firm predicted that by 2017, customers will actively engage with four out of five Fortune 500 companies on social media, compared to fewer than one-third of firms today. Meanwhile, MIT research projected that firms at the top of their game in terms of managing social media and other disruptive technologies will generate enviable financial results: They’ll be 26 percent more profitable and enjoy 12 percent higher market valuation and 9 percent greater revenue creation. On the safety front, Computerworld’s 2015 Forecast predicted that enterprises would increase their spending on security technologies by 46 percent, while cloud computing would see a 42 percent uptick in investment.
Where should firms go from here?
Clearly, establishing a technology committee and inviting tech experts into the boardroom is the way to go for several reasons:
- Cybersecurity is elevated to the board level, commanding the attention such a serious topic deserves.
- Firms can quickly arrive at informed decisions related to digital business opportunities.
- Rather than simply scratching the surface, enterprises can connect with tech-savvy clients and consumers on a deeper level.
“Smart board-level and executive involvement in technology strategy has never been more important as it relates to technology and security,” said Symantec Chief Operating Officer Stephen Gillett. “More than 552 million identities were exposed during security breaches in 2013 alone, and this year is expected to increase. When technology and security is so close to the heart of every enterprise – and with dramatically increasing complexity – the danger of underinvestment and lack of board-level governance isn’t just a factor of budget, but also of expertise and attention.”
With Symantec’s 2014 Internet Security Threat Report revealing a 91 percent increase in targeted attack campaigns in 2013, the time is now for companies to protect themselves. Firms that are unsure how to begin the tech-savvy executive recruiting process should consider turning to Caldwell Partners for assistance.
View our infographic
About Caldwell Partners
Caldwell Partners is a leading international provider of executive search and has been for more than 40 years. As one of the world’s most trusted advisors in executive search, the firm has a sterling reputation built on successful searches for boards, chief and senior executives, and selected functional experts. With offices and partners across North America and in London, the firm takes pride in delivering an unmatched level of service and expertise to its clients.