Based on a comprehensive machine learning analysis of the digital know-how of all the boards of US listed businesses, the study found that companies whose boards of directors have 'digital savvy' outperform others.
'Digital savvy' was defined as an "understanding, developed through experience and education, of the impact that emerging technologies will have on business success over the next decade".
Interesting variations emerged across industries, with boards of directors in some sectors being significantly more 'digital savvy' than others.
The study concludes that having a digitally conversant board has become essential in an era of digital disruption and digital transformation. With nearly every company looking for ways in which digital technology can be used to improve business models, customer experience and operational efficiency, boards must play a key role advocating and supporting change. Based on the evidence presented, those that do will see better financial results than those that don’t.
"Doing business in the digital era entails risks ranging from cybersecurity breaches and privacy issues to business model disruptions and missed competitive opportunities. When a board lacks digital savvy, it can’t get a handle on important elements of strategy and oversight and thus can’t play its critical role of helping guide the company to a successful future. But companies can fix that by understanding what characteristics to look for in existing and new board members, managing board agendas differently, and cultivating new learning opportunities."
Self-directed learning has a key role to play here with many board members filling their digital kowledge gap by taking online and in-person courses, reading research reports and case studies, attending technology conferences, and finding reverse mentors - “digital-native” colleagues - to learn from.
You can read the full article here.
Our next 'Leadership in a Digital Era Masterclass', with the University of Edinburgh Business School, takes place on the 10/11 October 2019.