The role of digital in the boardroom and in the C-suite has changed dramatically in the last few years. Board and executive surveys support this role becoming increasingly important. Understanding, managing, and predicting what will happen in the digital world is complex, and it’s changing so rapidly even the experts can hardly keep up.
Most boards focus their agendas on the stalwart functions: compensation, audit, finance, and managing risk to provide the fiduciary oversight of the CEO and senior executives that they owe to shareholders of the company. Some boards have started to incorporate cybersecurity into a the audit committee, but most have not formally addressed these issues. So, it’s important to start define what the role of digital oversight will be on your board as you consider all facets of digital.
Once you have defined that role, you can begin to implement best practices:
Form a Digital Committee.
Create a committee that meets with senior executives and ensures that there is a cybersecurity plan and a holistic digital strategy for the company. This is important oversight for senior management’s development of a plan, following the plan, and having checks and balances in place. This committee should work to ensure that all facets of important oversight for senior management’s development of a plan, following the plan, and having checks and balances in place. This committee should work to ensure that all facets of digital and data are being considered at a macro level and that silos or status-quo thinking have not downshifted your effects into the weeds.
This committee can ensure there is high-level thinking across the organization about digital. It can oversee these functions across key leadership roles in the company.
Reporting to the digital committee should be:
- The CMO, on marketing and how the consumer is connecting to the company in the digital world
- The CIO or CTO, to ensure that the cybersecurity plan is in place, tested, and continually improving
- The CLO, on how privacy, intellectual property, and Internet policy are being considered
- The CEO, providing insights into the future strategy of the company and on signals of change that are coming
- The CDO, to report directly on how the company is building a holistic approach to digital
The digital committee should then ensure that coordination and checks and balances exist among these groups, that their interests are aligned, and that they share resources. The digital committee should concern itself with mobile and the Internet of things, the online experience, social media, e-commerce, security, and the future of the Internet. This level of oversight is essential to ensuring that status-quo thinking does not impede the company so that it misses opportunities or, worse, suffer a catastrophic blow from changes in the marketplace.
Hire a Chief Digital Officer.
In Digital in the Boardroom, chapter 8, I spend a lot of time describing the role of the CDO. You can encourage your CEO to have the CDO report directly to him or her so that you as the board get briefed and updated regularly. If digital is buried under marketing or IT, then your briefings may not include all of the information you need to have. Consider the role of a CDO and the benefits it could provide to your company in an age where digital is critical. Asking the CLO, CIO, or CMO to do a second full-time job might meet the political demands of the current C-suite structure but could also undermine your ability to have a leader clearly focused on one of the most important components of your business.
At the board level, you need to get a clear assessment of the digital state of your company on at least an annual basis. The CDO may have to work in tandem with the other C-suite executives, but that helps to create those checks and balances.
Redefine or reassert the board's role.
The board is not to solve the problem or find the strategy, but to ensure that someone is looking out for problems and reporting them -- and that you have a strategy so you can perform your functions. Define this clearly with senior executives so that they understand the level of accountability expected and the ramifications of resulting failures.
Plan a Digital Retreat.
If you have not spent a lot of time discussing digital in your board meetings, it may be time to schedule a half-day or full-day retreat to fully debrief on how your company is managing these threats and opportunities and how it approaches a holistic digital strategy. Board agendas are already packed with little time for additional information, so carving out a day to spend just on this issue may be extremely valuable in defining your role at the outset on digital and understanding the current state of digital intelligence in your organization. Schedule a retreat and consider a few sample agenda items. Be sure to bring in outside experts to educate and provide insights on some, or all, of these topics:
- Cybersecurity. Get a briefing and review of the company plan (how you are preparing, practicing, and improving on a continual basis)
- Digital threats
- Digital opportunities
- Data and how it’s used across the organization
- Forecasting the future based upon the signals and data
- Audit, prepare, practice in action
- Social-media training for board members
- Do’s and don’ts
- Privacy threats
- Changing settings on smart devices and social media networks to protect you from yourselves
Perform a Digital Audit.
Once you have defined your role and done a deep dive into understanding the threats, risk, and opportunities to your company in digital, plan for an annual digital-health check. Much like financials are audited, digital (meaning everything we just discussed, from cybersecurity to new Internet policies, new data, and how to bring it all together) should be audited to ensure your company leaders are working together and there are checks and balances in place. Think about the financial crisis that led to the need to separate accounting and audit functions and the importance of having checks and balances to ensure that one viewpoint does not dominate and expose the company to risk.
The same philosophy should apply in the digital arena. The exposure of missing something is too high to assume it’s being taken care of. You need to ensure you audit your digital. So hire someone external to conduct an independent review. Asking your team to do it may be cost-effective, but it also comes with inherent biases that could skew the results. This is too important to the health of your organization to leave to an internal project manager. Hire an expert, audit all of the functions, and understand where there is overlap, where things are missing, and how your digital health can be improved.
A digital audit should include interviews and study of how all facets of the digital experience are being handled inside your company. The interviews should not just be of senior management, but also line managers to understand what problems they encounter, what the biggest concerns are, what threats they have encountered, and how they manage their resources and budgets. I’ve referred to the digital audit as Digital Mapping® to truly map the digital experience. But it can extend even beyond just the digital.
Invest in Board Training.
Most board members are men over the age of sixty-eight, according to PWC’s annual corporate director’s survey. About 49 percent of Internet users over the age of sixty-eight use social media (according to Pew Research). In the eighteen-to-forty-nine age demographic, it jumps up to 80 percent. So, it’s quite possible that if you are on a board of directors of a publicly traded company, you are not addicted to Facebook or Twitter. Or you are, but personally, not professionally. You don’t have to become addicted to Facebook or start a Twitter campaign to understand digital. But you do need to know how social media impacts your company and be aware of personal exposure points.
And keep in mind that this is way beyond just Facebook and Twitter. If you aren’t familiar with any of them or many members of your board need a refresher, get some training so you can discern fact from fiction and weigh in on important issues when they’re presented to you. This could be part of your digital retreat.
It can also be helpful for board members to have some one-on-one coaching to understand social media, mobile, and digital-privacy settings to ensure you know what you need to know and are prepared for what lies ahead. Most of us don’t want to admit when we don’t know something, so doing it in private and with a personalized approach may be more effective.\
Turn Off the Status-Quo Mentality.
Continually question if the status quo is plaguing your business. Do executives from your company say they don’t like change? Are they advancing their own career agendas instead of the company’s strategic goals? Will senior executives leave before the decisions they make impact you on the board? These are all very likely. It’s obvious that most people don’t like change, and of course they want to advance their agendas. This is human nature. It’s what happens to us when we’re in companies for a long time and reach a point where we want to protect ourselves or position ourselves for our next moves or exit plans. This is going to happen even in the most entrepreneurially oriented companies. But while executives leave for brighter opportunities, board members traditionally do not and will be held accountable by stakeholders.
At the board level, you need to ensure that status-quo culture is not limiting your executives’ ability to see future trends and spot opportunities or prepare for serious threats. Look for clues in reports from executives. I given examples throughout Digital in the Boardroom of paradigm shifts that weren’t spotted in time. Ask your senior executives what they read to stay on top of trends and how they push boundaries and thinking.