Digital technology in the boardroom

Digital technology in the boardroom: directors worldwide will have to get used to it as part of their corporate governance education. Are you ready? 

If you are a current or aspiring board member, it’s time to consider how technology will impact your work. It all comes down to effectiveness and how technology can enhance – not replace – your experience in future board roles. 

This guide will illuminate three factors shaping digital technology in the boardroom.

Embracing change holds the key to:

• Building resilience
• Staying relevant
• Achieving sustainable growth

In the digital age, when everything moves at the power of 10, agility and scalability are central to embracing change. Both qualities are critical in helping businesses pivot accordingly to survive or thrive. 

Most companies’ boards of directors and senior business executives understand this fact. Digital technology is the most significant change the world has seen since the end of the Second World War. This has led the World Economic Forum to label digital technology the epicentre of Industrial Revolution 4.0.

However, data from the Corporate Governance Institute in 2023 revealed that nearly two of every three board members don’t believe they know how to handle new tech properly. 

This is a worrying fact. It immediately calls into question the board of directors’ readiness to counsel companies as they navigate the web of digital transformation. In the uncertain, political, and expensive corporate environment of the 2020s, the window of opportunity to lead a company’s digital transformation is narrowing.

It sometimes feels like a distant memory, but the pandemic dust is settling and will for years to come. And now, it’s increasingly evident that battle-hardened companies relied heavily on digital technology to survive. Some even thrived!

According to an IBM Institute for Business Value report, six in 10 companies accelerated their digital transformation over the past two years. The change in how we work, study, and play brought about by the pandemic forced this acceleration. These companies will likely continue to thrive, barring unforeseen circumstances. 

The pandemic changed the status of digital transformation from important to urgent. As uncomfortable as some were with virtual meetings, it was the only way to connect with colleagues and clients. To some extent, it helped society and businesses retain a small dose of normalcy in an unprecedented time.

As digital technology advances further, you may fear that it’s getting too complex. But this is only true if you fall too far behind. 

Digital technology is in a race against itself. It constantly mutates, leading to different and better ways to do things. The speed at which those things are being done has also increased. 

Keeping up is itself a challenge, but a worthwhile one. To retain some sanity, priority should be given to digital technologies of immediate concern to your work, company, and industry. The last thing a company wants is to be seen as a digital technology laggard and negatively impact the company’s future business strategy.

The pace and intensity of change are unlikely to ebb anytime soon. We are, after all, in the early stages of Industrial Revolution 4.0. It is safe to assume it will accelerate further.

In-home learning did not work for many students in the early days of the pandemic. They either lacked the equipment or were let down by a poor internet connection.

Stories of students climbing trees or rooftops to secure a connection were comical at the start but soon revealed a reality — the emergence of the digital-less socioeconomic strata. Surprisingly, they are present even in the most developed countries. 

In business, companies without the proper digital infrastructure will eventually be placed at a disadvantage. While many are smaller businesses, the point captured in a HBR article below suggests big businesses too can cave in unless digital transformation is taken seriously.

To ensure effective leadership and corporate governance, company directors must take note—the digital tsunami is knocking at the door. You are not immune from it. In the boardroom, questions will be asked and answered, and decisions will be made that require digital awareness if not intimate knowledge. 

But for now, at least, directors are inadequately equipped to perform the role of governance on matters concerning digital transformation. With the quality of corporate governance under increased scrutiny, the onus is on company directors to up the ante in this respect. 

Aside from change being the only constant factor in business, an effective board must now account for the speed at which change occurs and the massive impact a small change can bring.