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Digital directors in industrial boardrooms

 


Global Manufacturing | June 3, 2017


The Global Manufacturing article, “Digital directors in industrial boardrooms,” co-written by Russell Reynolds Associates Consultants Jens Thomas Pietralla and David Finke looked at the role of digital directors, the value they bring in the boardroom, and how to identify and attract them. The article is excerpted below. 

The rise of the Industrial Internet and the Internet of Things (IoT) has meant that companies are facing significant business model, organisational and talent management challenges. In our previous Manufacturing Global article, we shared how companies can overcome these challenges and harness new opportunities from a talent perspective. This time we focus on the role of digital directors, the value they bring in the boardroom, and how to identify and attract them.

What is a digital director?

Non-executive leadership plays an important role when it comes to strategy, investments, and risk management related to an industrial company’s digital transformation. Having someone who asks the right questions and challenges management in a constructive fashion can be a powerful catalyst for change. In our opinion, traditional industrial goods companies should ensure the participation of at least one board member who has a digital background. This will help digital stay near the top of the agenda in the boardroom.

In the context of industrial manufacturing, a digital director can be defined as someone who has had recent executive experience in a company that develops core technology, a digital web-based company, a digital/IT consultancy, or has been in a digital leadership role in a non web-based company. We analysed the boards of 50 of the leading global industrial manufacturing companies to understand the extent to which new digital directors have been appointed in the past two years. Of 102 new directors appointed since January 2015, only eleven met our definition of a digital director. This is somewhat alarming given the imminent need for digital transformation in the industry.

Of course, it is important to recognise that boards have a limited number of seats and that director appointments must often cover several areas of expertise. Ideally, all board members, including those with digital expertise, bring broad perspectives rather than “single issue” focus.

To read the full article​, click here.

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Digital directors in industrial boardrooms