Technology deficit in the boardroom hindering innovation

A new report from Deloitte Global finds underinvestment in technology caps in boardroom engagement on digital transformation.

business background meeting in business lounge, senior fog and executive team having a project discussion in office
Image: Mongkolchon / Adobe Stock

Even in a world that has grown digital, a new report finds that technology strategy and experience are lacking in the boardroom. The Deloitte Global report revealed that “board members are uncomfortable assessing their organizations’ digital transformation progress and need more technology experience.”

This gap between the level of technology engagement that organizations need and what often exists in the boardroom may ultimately jeopardize digital transformation and value creation strategies altogether, according to Deloitte.

The report was prompted by $ 4.4 trillion in 2022, according to Gartner. At the same time, cyberattacks have been proliferated globally in the past two years. Deloitte wondered whether boards have stepped up their engagement on tech concerns including cyber and investments, and also whether they have effective stewards and helping ensure technology is supporting strategy – and not the other way around.

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“The research has revealed that they have been engaged in technology matters for many years; many board members lack the knowledge they need to ask informed questions and ensure technology is not driven by strategy, not the other way around, ” the report stated. “More broadly, this is creating a gap between the level of engagement organizations need and what is commonly taking place in the boardroom.”

Boards lacking technology leadership and experience

Organizations are looking for a stronger board engagement in their technology strategy. However, they provide enough oversight of technology matters. A similar number of executives (44%) said that their board directors lack the knowledge they need to provide effective stewardship in this vital area.

The research has found a number of challenges to the board over digital, cyber and new technologies including overreliance on management, deficiencies in tech fluency, vague tech governance structures, poorly defined management information and unclear links between technology and strategy.

“Organizations need greater leadership and collaboration to successfully embark on digital transformation,” said Mark Lillie, leader of Deloitte Global’s CIO Program, in a statement. “From a board perspective, directors need to be proficient in technology and technology.”

A sound understanding of technology and its benefits may help speed up digital transformation. Deloitte Global’s survey highlighted significant difficulties in measuring the success of tech investments. In fact, four in 10 respondents said their biggest challenge is demonstrating the cause and effect of technology investments and growth.

One in three states that focuses too much on ROI and short-term gains dominates thinking, instead focusing on long-term value measures. Also, one in four is the largest barrier to identifying investment.

Opportunities to increase technology engagement

Deloitte Global’s survey paints a portrait of a boardroom that’s not connected as it wants to be with technology – however, respondents offer productive next steps to become more effective stewards of digital, cyber and new technologies.

Sixty-six percent of directors, along with 61% of executives, recommended educating board members on the latest technology trends. A similar subset of respondents recommended developing a more holistic plan and strategy.

Other tech-fluent board members have a wealth of experience on the board and to make technology a standing agenda item at meetings.

“Directors should be able to decide whether,” said Dan Konigsburg, leader of Deloitte’s Global Boardroom Program, in a statement.

The C-suite and boardroom executives can complement one another to drive a technology strategy, said Rich Nanda, principal at Deloitte Consulting.

The report polled more than 500 directors and C-suite executives to explore boardroom perceptions on technology and investment.

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