Signaling digital talent: how tech officers can score board seats
The Global Banking & Finance Review article, "Signaling digital talent: how tech officers can score board seats," was written by Russell Reynolds Associates Consultant Katrien Demeester on recommendations for technology leaders looking to join a board of directors. The article is excerpted below.
Tips for tech officers to build corporate board readiness
As financial institutions increasingly grapple with unprecedented business disruptions and the bar is raised for innovation, the needs of corporate boards are evolving fast. In today’s shifting business landscape, boards of global financial services firms are navigating emerging challenges in data management, cybersecurity and digitization – areas where functional technology officers have in-depth, hands-on knowledge.
In the face of growing competition thrusted by neobanks and challenger banks, like N26 and Monzo, there appears to be a widespread digital divide that’s putting global banks and financial services firms at a distinct disadvantage. In Arizent’s Digital Banking Report 2020, 75% of banking respondents identified digital transformation as a top priority while innovation, operational excellence and culture development ranked as the three lowest priorities. This reveals a trouble paradox in banking, considering the lowest ranked priorities are influential and foundational in making digital transformation happen.
To bridge the digital gap, more corporate boards are filling seats with tech-savvy talent. For example, there has been a recent influx of tech and digital director additions to 300 S&P Global boards, of which more than a third joined within the last two years according to recent research reported by Russell Reynolds Associates. In Europe, 65% of corporate boards have at least one ‘tech’ non-executive director in 2020, compared to 76% of corporate boards in the Americas.
Despite boards needing more functional tech expertise, executives from the technology industry are earning the lion’s share of the new ‘tech seats,’ not functional technology leaders such as chief information officers (CIOs), chief digital officers (CDOs) or chief technology officers (CTOs) who have hands-on technology skills as well as direct corporate governance experience. And, going back to the research report from Russell Reynolds Associates, globally, financial services is among the sectors where technology and digital-focused directors are the least represented on boards, trailing behind healthcare, consumer and technology sectors.
Tech officers can bridge the digital gap in financial services
Tech-savvy board directors play a key role in enriching the overall digital fluency of boards and raising fellow directors’ awareness of technology risks, challenges and opportunities. But functional technology officers, in particular, advance digital fluency a step further and help boards evaluate an organization’s readiness and specific needs for any given technology. Given their previous experience in implementing new technology to overhaul business processes, technology officers are skilled at educating fellow board members and management teams, while also providing organizational oversight on technology transformation.
Additionally, technology officers are well versed in syncing up technology adoption with overall business strategy, knowing that in today’s landscape the two are one in the same. They are also adapted to the creative sparring that happens in board rooms about technology adoption and have experience bringing everyone together onto the same page, turning potentially contentious debates into productive resolutions.
Traditionally, the technology officer, particularly the CIO role, has been viewed as a supporting positioning rather than a strategic function. But now that digital transformation initiatives are core to organizational success, this outdated perception must be adjusted. Strategic initiatives are not only being implemented by technology officers, they’re also being initiated and led by them. Moreover, corporate governance, risk and compliance (GRC) processes, especially in critical areas like cybersecurity and GDPR compliance, are now largely being led by functional technology officers.
Tips for tech officers to build corporate board readiness
Despite espousing the expertise and skills needed to help boards thrive, joining a board can be difficult for technology officers, even for seasoned chief information officers, chief technology officers, chief information digital officers, chief data/analytics officers, etc. That is because board selection committees unfortunately often have an oft-held misconception that technology officers lack the broader business and strategic acumen compared to fellow C-suite players, like the CEO, Business Unit Leader, CFO or COO.
Furthermore, particularly in financial services, some boards’ selection committees prefer to go with a candidate from a recognizable fintech company because they believe that’s where the best technology talent is coming from.
So what does it take for technology officers to overcome these limiting preconceived notions and become corporate board directors? Below are key considerations for technology officers looking to move onto the next step in their career, exhibit leadership capabilities and enhance their chances of securing a seat on a reputable corporate board in the financial services sector:
- Broaden your scope: Actively seek opportunities within your organization to take on additional responsibilities that heavily rely on your strong affinity with technology and digitalization. For instance, taking on the company-wide sponsorship for agile roll-out, evolving into a COO role, or leading an innovation and incubation initiative.
Emphasize strategic achievements: Simply being a dutiful order taker or a proven executioner does not strengthen one’s candidacy for a board seat. After all, boards are ultimately charged with leading the long-term success of their organizations. Therefore, board members must serve as strategic assets and consultants for the organizations they serve. It is crucial to underscore your strategic achievements and outline how they align to specific corporate goals.
Acquire alternative board experience: Unlike other functional leaders, such as CFOs and CHROs, many organizations do not yet have their technology officers sit on the executive committee. However, this arrangement is changing across organizations so it is possible that more technology officers will find themselves participating on executive committees, thus gaining more comprehensive board interface. But when this is not possible, technology officers can proactively refine their board experience by applying for a board position in a subsidiary of the company they work for or gaining alternative board experience in an association or nonprofit organization.
- Diversify your expertise: Technology officers who have worked across different sectors or across different functions will increase their chances for being selected for a board seat, as it makes them better lateral thinkers and more malleable in the eyes of nominating committees. Broaden your professional horizon by gaining experience within various areas of financial services, such as financial institutions, investment banking, commercial banking, wealth management, corporate finance, real estate, payments and fintech or within other sectors.
- Be vocal about your ambition and expand your network: Most board openings are communicated through the networks of board directors, meaning their contacts will likely be the first to find out about the opportunities. Developing your network strategically with those who serve on corporate boards and informing them about your desire will greatly increase your chances of learning about open board positions and eventually securing the seat.
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