The CTO who sits on the board

A decade ago, a technology question that reached the board was usually a question about cost. Today, it is as likely to be a question about the survival of the business.

Cyber security, artificial intelligence, the resilience of critical systems, the economics of digital channels: each of these is now a matter of strategy and of risk. Yet the composition of most boards has barely changed.

The expertise gap

Many boards still have no non-executive who has run a technology function, built a software product, or managed a significant cyber incident. These boards are not short of intelligence or experience. They are short of a particular kind of fluency that allows them to ask the right questions of management and to judge the answers.

“A board does not need to understand the technology. It needs to understand what it does not understand.”

Why the obvious solution often fails

The instinctive response is to appoint a technologist to the board. Sometimes this works well. Often it does not, for two reasons.

First, many excellent technology executives are not natural non-executives. The skills that make someone effective at building and running engineering teams are not the same as those that make them effective in a boardroom, where influence is exercised through questions rather than decisions.

Second, a single technology director can become the board's designated worrier, the person to whom every technical question is referred, while the rest of the board disengages. That defeats the purpose.

What works better

The most effective boards take a broader approach.

• They appoint non-executives with technology experience who are also credible on strategy, finance or operations, so that their contribution is not confined to one topic.
• They invest in the technical literacy of the whole board, through briefings, site visits and time with engineering teams.
• They give the chief technology officer, or equivalent, regular and direct access to the board, rather than filtering technology through the chief executive or chief financial officer.
• They use external advisers for specific, deep questions, such as a security review or an assessment of an acquisition target's technology.

A question for every chair

The test is simple. If a significant technology failure occurred tomorrow, would your board be able to understand what had happened, judge management's response, and make good decisions under pressure?

If the honest answer is uncertain, the time to address it is now, before the question is asked for real.