Following the upheaval in 2020, boards will be more focused than ever in 2021 on building resiliency and finding a competitive edge. The EY Center for Board Matters recently identified six priorities for boards in 2021 (pdf). A strong, strategically minded chief information officer (CIO) can help the board address each of them.
Many of this year’s priorities focus on multi-stakeholder factors — human factors such as remote working and commitments to diversity and inclusion; societal factors such as environmental, social and governance (ESG) practices; and consumer factors such as regaining customer trust and loyalty as companies emerge from the pandemic. Metrics and KPIs around these activities might be new or unfamiliar to some CIOs, but they are essential for delivering value to the board.
CIOs can support boards by creating better board materials to address multi-stakeholder priorities, including a long-term value dashboard that includes data around these human, societal and consumer factors, as well as more traditional financial and risk-related information. If it’s built intelligently and updated regularly, the dashboard can give boards a head start on helping their companies achieve their top priorities.
This expands the notion of the CIO function. Instead of a narrow technology role, siloed in a cost center, the CIO becomes a full-fledged partner that adds value and bottom-line benefits to the business with direct support to the board and executive leadership through enhanced reporting and enablement.
Here are six board priorities and how CIOs can focus on them to strengthen their relationship with the board and provide long-term value for the business:
1. Oversee strategy to create long-term value
The board’s strategic responsibilities require an understanding of megatrends, market dynamics, financial flows and any other material business developments to bring an external view to the company. Today, technology often underpins those material business developments, and the CIO’s remit to the board is to understand those technology trends and share that strategic perspective.
CIOs must assess the fitness of new and emerging technology for their given industry sector and the business itself. Consider the emerging array of cloud services, which might be readily adopted by some businesses but kept at arm’s length by companies with institutional processes that tend to want things “in-house.” CIOs are technologically focused by nature, but they must balance that predisposition with a business mindset.
The board also needs data, but it also requires a perspective on how data can deliver a competitive advantage. That starts with information about the economic ecosystem in which a company does business.
In tandem with the chief financial officer (CFO), the CIO should gather and analyze data with an investor lens, including venture capital investments, M&A activity and other money flows both inside and in adjacent industries. Among other benefits, this shows who the company might partner with to grow the business and what competitive movements are occurring.
Internal data is also critical, as it helps the board improve its oversight of risk management. The CIO can add value here by helping the board see potential operational weaknesses, untapped business opportunities and potential strategic pivots.
2. Promote enterprise resiliency amid uncertainty
The board is the ultimate steward of business resiliency and, now more than ever, that means overseeing risks around technology. The CIO has multiple responsibilities to the board to drive enterprise resiliency — and thus multiple ways to add business value.
First, the CIO must make sure the board understands potential downside risks, particularly around cybersecurity. KPIs and other data should be focused in ways that enable the board to understand trends — the increasing prevalence of ransomware attacks, for instance. Working with the chief information security officer (CISO), the CIO should also run boardroom pilot risk exercises, such as simulating a cybersecurity breach, to both illustrate these risks and demonstrate the CIO’s plans to handle them.