More than 350 directors told us how they are overseeing strategy and risk as their companies adopt disruptive technologies.
Digital and emerging technologies can enable innovation and disrupt existing business models. Many companies are increasingly considering how emerging technologies can improve operational efficiencies, create new products and services, and help their organizations enter untapped markets. They are also surveying the landscape for competitive entrants seeking to disrupt their industry.
Of course, adopting new technology can be challenging and can have far-reaching effects inside and outside an organization. While many of these can be positive, others can lead to unforeseen risks and unintended consequences. For instance, implementation can bring about risks related to alignment with new or existing business models, resources and training, security and data management, and overall project management, to name just a few.
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Overlooking the opportunities and risks related to disruptive technologies can be costly but so too can a rush to implement them. In this report, Corporate Board Member and EY present the key findings from a survey of 365 corporate directors on the topic of disruptive technology. Here’s what we found:
- Directors are divided on whether their boards have the appropriate resources to move their companies forward in this era of digital disruption.
- Most boards rely on management as their primary source for staying current on industry trends and emerging technologies and innovation.
- Directors say the biggest challenges to adopting emerging technology are those related to integration and talent.
- Boards can help their organizations mitigate risks brought on by disruptive technology by including the topic on the full board agenda and reviewing the organization’s enterprise risk management framework.
- A majority of directors agree that boards can enhance their oversight of disruptive technology through tailored board training and education.
Having the right resources
Directors are divided on whether their boards have the appropriate resources to move their companies forward in this era of digital disruption.
Nearly half of the directors in our survey indicated being unconvinced that their boards have the appropriate resources to navigate the disruption caused by emerging technology.
Our data shows that boards are more confident in their management team’s acumen in these matters, with fewer than half (46 percent) of directors saying they feel “very attuned” to the potential disruption of their organization and industry, compared to 69 percent who responded the same about management.