Blog: Claudia Imhoff

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Wake Up, Directors - IT is Important Too!

Ron Powell (publisher of the B-EYE-Network) sent me an email about a recent survey of 450 Directors of publicly traded companies (with revenues of over $1 billion) conducted by Deloitte Consulting, LLP. Apparently most corporate board members are really good at talking up a good story about how they support aligning IT with the corporate strategies they develop. Unfortunately their actions say otherwise...

Here are some of the key findings from the survey:

1. Ten percent of boards relegate IT matters to a board committee. Geesh -- you mean they don't even talk about these matters in the actual Board meetings? Guess not -- see the next bullet...

2. Only 11 percent of boards even discuss IT at every meeting. Something as critical at IT infrastructure, direction, funding, etc., gets ignored almost 90% of the time?

3. Fourteen percent of the directors say that their boards are "completely and actively involved" in IT strategy. Let's hear it for these intelligent Boards and their repective companies. I wish I knew who they were.

4. At least those that report effectiveness in executing IT strategy admit that it correlates to better financial performance. Perhaps the other 86% of the respondents should sit up and listen.

5. According the the survey, 52% of the respondents say their board will NOT be spending any more time on IT over the next three years than it currently does.

6. Interestingly enough, the results indicated that when the CEO leads the discussion, boards are more involved in IT. The CEO gets it -- even if the rest of the directors don't...

This in the face of overwhelming evidence that there is a significant correlation between the attention paid to IT and corporate performance. Shame, shame!

Kenneth Porrello, a principal with Deloitte Consulting, states "...a gap exists between the emphasis the board appears to place on IT and the steps they are taking to address it. Many directors and senior executives blame this gap on the number of things that have been hitting the board's agenda and a resulting lack of time". Yeah, right -- like excessive executive pay, for example? Maybe investigations into compliance issues?

Mr. Porrello continues "...this excuse is becoming less credible given the growing importance of IT". Yes, indeed, it is important. According to T.K. Kerstetter, President and CEO of Corporate Board Member, "...technology and IT are key business strategies and typically are accompanied by capital budgets reaching as high as a billion dollars in larger companies. The days of not understanding IT in the boardroom are gone, and I expect we will see more CIOs and CTOs invited to serve as board members in the years ahead".

I can only hope his prediction comes true.

Yours in BI (and Board attention) success.

Claudia

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