Digital future worries directors
Survey shows 70% doubt ability to cope
More than two-thirds of directors have doubts about how prepared their organi sations are to handle the digital future, a new survey has found.
The fourth Annual Director Sentiment Survey, released today, shows that just 30 per cent of directors think their boards have the capability to lead their business’ digital future.
At the same time, 58 per cent felt they would face disruptive technological changes in the next two years.
“The ability of directors to navigate the rapid changes caused by the digital revolution is a key challenge, and should be a priority for boards,” said Institute of Directors (IOD) governance leadership centre general manager Felicity Caird.
“Social media and the risk of cyber breaches also mean that companies operate in a more complex environment where comprehensive ethics reporting and risk management is vital to sustainable success.”
The results indicated a growing awareness that new skills would be needed around boardroom tables, something that might bring personnel changes, Caird said.
“It should always be a constant focus of boards to be checking that they have the right capabilities and skills to drive their business forward and this is the new gap: it’s now about building digital capability in the same way that 10 or 15 years ago it was about building financial literacy across the board.”
ASB chief economist Nick Tuffley said businesses around the country were becoming increasingly aware that digital disruption was going to be a major issue in the future.
“It’s not necessarily just a technology-based issue; a whole host of business models could get upended by new technology or new players coming in . . . You may be top of the pile at the moment but you can easily have someone coming through doing the same thing in a much more innovative, nimble and customerfriendly way.” Uber was a prime example of this. Another key theme from the survey was concern among directors about the capacity and quality of labour available to businesses.
With unemployment forecast to edge down, this would see the labour market get tighter still, Tuffley said.
“The issue of businesses finding the right people is going to be one of their challenges and we will see it intensifying in the next couple of years.”
Another interesting issue was the notable difference in the importance various sectors placed on diversity as a factor in board appointments.
In government organisations it was 76 per cent, 75 per cent in not-forprofit organisations and 70 per cent in listed companies. In larger, private companies and small- to- medium enterprises it dropped to 54 per cent and 50 per cent, respectively.
Tuffley said that despite the survey highlighting uncertainty around the overall economy, it indicated strong business confidence.