The corporate board has to ensure management and governance are interdependent and complementary disciplines that are both enabled by high mature digital IT.
With the fast speed of changes and exponential growth of information today, corporate board directors need to be the digital gurus with the ability to lead, influence and innovate.
Generally speaking, in the boardroom, the key dimensions of practicing corporate governance discipline are policy setting, strategy oversight, performance monitoring, as well as understanding the accountabilities of the environment - regulatory, shareholder, etc.
In practice, where would one expect IT to come into board conversations for improving governance effectiveness and leadership maturity?
Business strategy: Information is growing exponentially and technology needs will only expand. IT as an integral and increasingly important aspect of business strategy development. The disruptive nature of IT is highly likely to have implications for business strategy and some elements of strategy may require IT-enabled organizational capabilities. The question is to establish whether CIOs recognize the strategic importance of information technology and in turn are motivated to set their sights on the boardroom.
On the rocky road to business transformation, innovation, and globalization, the corporate board and senior leadership team need to have a good strategy on how they leverage information technology to make the right decision to win in the marketplace. With an eye toward board service, IT leaders must learn how to better communicate information technology advantages in business terms so that thoughtful strategies can be evaluated and the associated risks weighed against the benefits and focus on the right strategic levers for success.
Business change investment: The corporate boards as a top leadership team can no longer avoid, delegate or ignore the need for technical competency among their ranks. A dysfunctional IT or poor IT investment could cause the entire business to fail even overnight. Corporate board service for IT leaders is about educating board directors with the varying backgrounds to understand the potentiality of information technology, gain an organizational viewing the technology discipline as a strategic function in the same way that finances or marketing strategies would be viewed. Through logical scenario planning, large investments could be avoided if they ultimately turn out to be unnecessary.
Understanding the importance of IT to the company’s business model is important for effective oversight of technology initiatives. The logical investment scenario helps an organization assess whether the business improvement associated technology is the right investment to be done in the first place, and ensure the expected return on investment. IT should come into the board conversations to ensure corporate board directors or senior leaders have sufficient knowledge and understanding of IT, they can make a sound judgment about IT investment and know-how to assess IT performance objectively.
Risk oversight: It is a corporate board responsibility to ensure that the strategy covers all important parts including IT, to question it and to finally make effective decisions about it, such as: How robust was the organization's risk assurance system, all the way up to the management board? How could that system miss something that has had a widespread impact? BoDs do not manage risks but oversee risk and ensure that management has put in place an effective risk-management process, and the directors assess whether risks are undertaken and managed consistently with the established risk appetite.
To oversee risks, the top seasoned board of directors with decades of experiences should share the valuable lessons in the past from time to time, to ensure that management has put in place an effective risk-management process, ensuring that business risks are identified, minimized, and controlled effectively, and the directors assess whether risks are undertaken and managed consistently with the established risk appetite. The corporate board and management can work on what strategies or small low-risk steps you might take now that can better position you to more quickly identify or turn the disruption into your advance.
Board performance: The corporate board’s role, in large part, is to make good decisions that enhance the value creation for the organization. The corporate boards have to spread their limited time on many important things, and they need to have superior time management skills, focus on the performance of the management team as well as their own performance. Effective governance must create excellent performance, especially for long-term business growth. The ignorance about the importance of cognitive difference and the behavioral dynamics that operate within their board is contributing to the generally poor performance of boards. Thus, a tech-savvy corporate board will have the advantage of pulling enough resources and pushing the business model of technology, trustworthiness, prepare, and launch change, innovation, and ensure what happens next.
IT becomes so critical to the success of the organization nowadays. IT savvy board expands its leadership horizon for improving their own performance and the performance of their company sharpens appropriate skills and competence around the board table to deal with business complexity. For the majority of the time, the board agenda should be focused on the performance progress toward the goals, targets, schedules, etc, of the value maximization planning.
The corporate board has to ensure management and governance are interdependent and complementary disciplines that are both enabled by high mature digital IT. The corporate board's role is to pull management out of the trees to see the forest; understand the business landscape through the broad digital lens, continue looking for a new perspective or alternative solutions. set the tone for change and proactively drive change with the step-wise approach and accelerated speed.
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