ANALYSIS: ADAPTING YOUR BOARD TO DIGITAL AGE:

INFORMATION and technology (IT) governance is a subset discipline of corporate governance which focuses on information technology, its performance and associated management risks. The interest in IT governance is due to the ongoing need within organisations to focus value creation efforts on strategic objectives and to effectively manage the performance of those responsible for creating this value in the best interest of all stakeholders.

Rapid technological developments have essentially transformed businesses by creating new opportunities and threats for both public and private entities.

Organisations are increasingly focusing on making sure that their business strategies are underpinned by the right technologies.

Chapter 3 of the National Code on Corporate Governance (“ZimCode principle”) Clause 59, recommends that every director should possess to the extent possible, the requisite skills and knowledge in relation to Information Communication Technology (ICT) and supportive equipment.

Principle 56 (g), further asserts that the board should have a charter setting out its role and functions ensuring that technology and systems used by the company are adequate to run its business viably.

Whenever boards are told about being digitally viable, the common response has been hiring a digital director or to outsource a Digital Officer.

This is not just about one person and as much as the existing boards’ generation feel intimidated by technology, they should understand that by working collectively they can achieve more in this digital era. Hence, there is need for more initiatives that help experienced directors improve their own digital IQ.

Many directors are feeling outmatched with the intensity of changing technology, IT emerging risks, and new competitors. Therefore boards must move beyond an arms-length relationship with digital issues and be prepared to embrace the pace of digital disruption in doing business. Board members need better knowledge about the technological environment, its potential impact on the different areas of the company and its value chain and consequently how digital change can undermine existing strategies and stimulate the need for new ones. Hence there is need to build IT programs to train and develop board members. It is the chairperson’s responsibility, together with the company secretary, to ensure that the organisation’s board members are well cultured and equipped in terms of the new technological developments with regards to the industry in which they operate.

Board Induction processes need to bridge the digital traditional gap through finding new ways of attracting digital talent. A few boards have enough combined digital expertise to have meaningful digital conversations with senior management. Thus, companies should consider recruiting more digital-savvy directors who are more likely to be younger than the average corporate directors.

The young generation directors will probably be more useful to entrepreneurial and start-up inspired styles of management. This generation has low tolerance for bureaucratic processes that slow down decision making which will result in an enhancement in innovation and creativity in fast-paced industries.

Every year more and more businesses are giving up on traditional advertising methods. Most companies are now focusing more on e-marketing, marketing software, search engine optimisation and social media, investing heavily on these resources. Zimbabwean companies should resign themselves to the idea of letting international competitors control the pace of digital disruption. This is the reason why the market gets increasingly competitive and foreign players get ahead of them. Local companies need to tool up in order to be able to monitor their competitors. This will allow companies to track competitor’s products and marketing strategies so as to stay abreast of the industry’s changes and practices.

Corporate structures that resist change must be broken down. The key driver towards motivating employees to be innovative and creative is by breaking down the traditional hierarchy structures. Also, board members need to continuously increase their digital knowledge if they hope to govern in a way that gets executives thinking beyond today’s boundaries. Considering that the speed of digital progress confronting companies shows no sign of slowing down, the best boards will learn to engage executives more frequently, knowledgeably, and persuasively on the issues that matter most in an effort to remain competitive in this new digital era.

This article is prepared by Zimcode (Joint Secretariat of ZIMLEF, IoDZ & SAZ). For more information on the Zimcode contact: admin@zimcode.net.