The COVID-19 crisis could soon be reflected in the composition of boards of directors. Russell Reynolds Associates anticipates a rapid increase in the importance of technology profiles. An MIT study last year indeed showed that businesses with more technology directors outperformed their market and competitors in terms of revenue growth and profitability.
In their recent study of the 300 largest companies within the S&P Global 1200, the executive search firm found that 36% of companies now have at least two “technology” or “digital” directors, up from 28% in 2018. Here, American companies are increasingly leading the way. On the other hand, Europe is stalling, with only two thirds of companies having one such director and 29% at least two. "Europe is gradually catching up, at the pace of board replacements," states Nicolas Schwartz, a Partner at Russell Reynolds Associates. These “Tech on Board” profiles are helping businesses prepare for the future. "Those companies who had demonstrated innovation and foresight by investing in technology, reacted best to this Covid crisis," adds Nicolas Schwartz, "as long as they kept the women and men who work there at the heart of their response to the crisis”.
Russell Reynolds Associates recommend that companies look at the current makeup of their board and also reflect on the future of their business, to ensure that their directors have the necessary diversity of experience and digital skills to support the company’s strategic transformation.
The board should work closely with the CEO to help the company be agile and versatile in a volatile world, where the pace of business can change fast. But, "be careful not to be blinded by “shiny” digital profiles who don't bring real expertise and value at board level" says Nicolas Schwartz.