Every Company Must Be A Great Technology Company
Proper oversight and governance of technology is now a core responsibility of boards. How many boards or investors know the true situation at their company regarding mission critical technology and tech teams? What are the known and unknown technology risks the company faces? How do boards and investors understand, identify and work with management to mitigate these risks before a crisis hits?
Technology failures and digital transformations have long been mission critical topics for all companies. Today, these areas are also a fiduciary responsibility of boards of directors. To address this, boards increasingly need to develop technology subject matter expertise on the board, and seek expert advice from qualified third parties.
The Sarbanes-Oxley Act of 2002 came in response to financial scandals in the early 2000s involving publicly traded companies such as Enron Corporation, Tyco International plc, and WorldCom. High-profile frauds shook investor confidence in the trustworthiness of corporate financial statements and led many to demand an overhaul of decades-old regulatory standards.
Similar issues now face companies with regard to technology. News reports on an almost weekly basis highlight the massive impact to companies from the failure of their technology to support mission critical business operations. This impacts almost all core aspects that matter; revenue, market value, brand value, customer experience and employees.
In the same way that it became a critical priority for boards to add financial subject matter experts and to ensure that they had a properly functioning audit committee with properly skilled chairmen, it is now time for boards to do the same with technology.
Most boards lack sufficient subject matter expertise in technology; many boards have little to none.
A growing number of boards rely on dedicated Technology Committees staffed by subject matter experts. Currently approximately 9% of the Fortune 500 do. These committees and the subject matter experts on them, are able to work with management and deliver informed and constructive governance for technology initiatives.
To be successful, the committees must have deep knowledge of how technology initiatives succeed and fail, of what topics to prioritize, how technology works today, and the driving forces of technology change.
They must also have access to third party advisors who can perform the more hands on work required to support Tech Committees to do their job. This is conceptually similar to the role third party advisors fulfill for Audit and Compensation Committees.
Providing a detailed risk assessment to help boards and investors understand the current state of a company’s technology and teams
Providing detailed recommendations on how to optimize technology functions and operations
Analyzing development velocity, scalability and tech stack viability to support initiatives
Work closely with CTOs and other technology leaders to improve outcomes