Meanwhile a separate Gartner survey revealed that 83% of CEOs will be focusing their investment budget on new digital capabilities this year.
This leads us to an important question – how can boards and CEO’s work together more effectively on what they both say is one of their most important issues?
The role of boards
Over the last two years boards have been convening more regularly to:
- Approve new digital strategies
- Assess the balance of short term wins with long term impacts
- Understand the impact on employees
- Assess corporate risk
- Communicate value to shareholders
Additionally, there is a growing requirement for boards to go beyond their traditional role of assessing, approving and reporting. In today’s fast moving digital landscape, it’s increasingly important that boards work collaboratively with their CEOs to set milestones, allocate resources strategically and create a framework for change that establishes clear criteria for whether decisions on initiatives should be accelerated or paused.
Boards also need to be increasingly attuned to helping executive leadership to assess and understand new commercial opportunities – particularly through partnerships. According to a report by EY on the habits that drive digital transformation, this means “boards should first steer the business to proactively explore those areas of value that are too challenging or require too much capital investment to achieve with existing capabilities. The business (led by the CEO) should then scan the market to identify potential partners”.
The role of CEOs
For their part, CEOs that lead businesses adopting digital ways of working need to be many things. They must be agile in their approach, have experience of change management, be open to partnerships, and have empathy with employees that are experiencing significant changes to the way they work.
CEOs must also work closely with boards to ensure that the pace of digital change doesn’t run out of control. Partly this means they need to be fully transparent with their boards on all potential risks – particularly with regard to cybersecurity issues related to digital systems that 88% of boards now view as a serious risk.
On top of this, CEOs need to be aware of the boards’ thirst for data. This was highlighted in a recent survey that found that 70% of boards want their businesses to increase investment in technology for risk management to give them up to date data on both emerging and atypical threats.
At the same time CEOs should be tapping into the knowledge with their boards of adjacent markets and potential new opportunities. The successful Board/CEO partnership of the future will use every available insight to make sure that organisations can operate safely, confidently and with a 360° view of what’s coming next.
Bringing it all together
On a more practical level, boards and CEOs also need to find ways to collaborate via digital channels to make communication more frequent and to speed up decision making – for example, by using specialist board portal technology.
With a board portal, directors can get easy access to both current and historical data from wherever they are located. CEOs can also use portals to share information securely with the board at any time and accelerate approval and sign off for new initiatives.
Along with the other requirements we’ve covered in this article, this kind of digital flow will be ultimately key to facilitating long-term partnerships between boards and CEOs and making their collective work on digital issues the success that it needs to be.