Digital transformation is a topic of conversation inside and outside the boardroom. While keeping an eye on the latest technological innovations, the board tends to take a keen interest in strategic technology decisions and focuses on the potential impact of the digital transformation on the company as a whole. However, the digital transformation is not only affecting the decision-making inside the boardroom. It impacts the board itself as well.
The way the board communicates internally, with management and even the role of the board itself are all impacted by digital technologies. This comes with challenges and opportunities, as thoughtful implementation offers gains, but overenthusiasm or blind application can hinder what boards are able to accomplish.
Does easier sharing result in oversharing?
Boards inherently rely on the quality and availability of the information shared by the senior management team to make knowledgeable decisions. There is a myriad of digital tools available to facilitate the sharing of this information. Board portals, for example, make sharing of documents and data easy, centralized, secure, and trackable compared to stacks of paper documents and emails. Digital communication tools can empower board members to more effectively fulfill their duty.
With the perk of easier sharing via digital communication tools also comes the risk of sharing too much. There is no cost to adding more slides, which can result in senior management providing the board with larger amounts of less digested information than in the paper days. While digital allows for more visibility and gives the board members the opportunity to analyze and classify the data to their own desire, an overload of information increasingly blurs the line between the role and responsibilities of the board and that of the executives.
Safety first
The digital transformation has allowed for better control, visibility, and security in the gathering, analysis, and sharing of data and information. It can definitely be deemed an improvement over paper documents. However, cybersecurity should always be considered, as is the case with any digital communication or repository tool. It is for example not uncommon for board members to use their personal email to access or transmit documents, which can pose a cyber risk. It is important to always keep vulnerabilities regarding cybersecurity in mind.
Advanced digital tools on the horizon
Recent and emerging technologies like the cloud, artificial intelligence (AI), and even blockchain will continue to push how information and data are captured, shared, analyzed, and consumed. These advanced digital technologies can enable the board to identify patterns and potential concerns automatically and facilitate more data-driven decisions. Early adoption is often favored over delayed implementation. However, these advanced digital technologies can be complex to use. When a digital transformation technology finds its way into the boardroom, proper training mechanisms for management and board members need to be put in place.
Before introducing a new digital platform or tool, it is good to evaluate whether it is senior management or the board who should really be using the advanced technology. Investing in digital transformation technology entails looking at the complete picture while realizing that it is a continuous process of keeping pace.
Successful companies establish digital prioritization from the top down. The digital transformation does not only affect what happens at the company level, but also the scope and execution of the board’s responsibilities. Effectively embracing the digital transformation inside the boardroom requires identifying the cost and gains of applying new digital technologies, and realizing that the job is never done.
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