Just 2% of FTSE 350 companies have tech representative on their board, finds research
New research has revealed that just 2% of FTSE 350 companies have a dedicated digital or technology representative on their board. According to Russam GMS, the findings raise serious questions about whether the right voices are being heard in the boardroom at a time when technology is driving commercial and societal change. With new figures this week set to lay bare the scale of the UK’s productivity gap, the new report highlights that embracing technology can boost efficiency and improve productivity. The issue is given greater urgency by the looming prospect of a post-Brexit world where UK firms will have to compete on their own in the global marketplace.
Russam GMS looked at the boards of FTSE 350 companies and found that just eight (2%) include a dedicated digital or technology specialist, such as a chief information officer (CIO) or chief technology officer (CTO). They include PayPoint, a payment technologies firm, mining and metals company BHP Billiton, and financial services company, Hargreaves Lansdown. Analysis of all FTSE 350 board members found that 125 companies have someone with declared technology background or experience; but this still only constitutes 36%. Russam GMS’ new report, Tech-tonic shift: Meeting the technology challenge in UK boardrooms, argues that CTOs should become as common on boards as chief financial officers.
Cathy Kay, director at Russam GMS, commented, “These are startling statistics. Many FTSE 350 companies will have a chief information or technology officer somewhere in their ranks, but the fact that only a handful have one on the board begs all sorts of questions about the ability of businesses to drive effective and lasting technological change.
“Technology is a company-wide issue, like finance or HR, and treating it as such is becoming increasingly urgent. The UK lags behind its G7 counterparts when it comes to productivity. Better use of technology is key to closing that gap – not just in terms of developing products and services, but running businesses more efficiently. What’s more, UK companies could no longer be part of the EU club rather soon and will have to stand on their own two feet. They will need to be armed with world-beating ideas, which will require a technology specialist at the most senior level to master the present and future trends of technology, and convince the rest of the organisation to change.
“Some companies will prefer to wait and let others take the lead on the tech front. Others will take a more dynamic approach, seeing change as inevitable and preparing a strong hand. It doesn’t take much to guess which approach is more likely to reap the biggest rewards. Companies now need to make a choice: set the pace with technological improvements or risk seeing their relevance erode.”
Russam GMS’ new report also finds that for businesses to be effective at embracing technological change, a CTO on the board is only part of the equation. For these individuals to make a difference, the board has to buy-in to technological change and set a vision that permeates down into the wider organisational culture.
Kay said, “The greatest ideas in the world mean nothing without the vision and will to apply them. A business cannot just appoint a CTO or CIO and give him or her a budget and a mandate to get on with it; the board and the wider company have to be ready to accept them.”
The report makes a number of recommendations in order to help both boards and businesses ensure they are ready to embrace technological change. They include:
- Appoint a CTO to the board who can drive the technology strategy
- Appoint an interim change manager who can help guide the company and work closely with the CTO
- Build a pipeline of tech talent and establish recruitment criteria to match business requirements
- Establish a digital transformation committee to help rationalise, define and design a technology strategy
- Run innovation workshops for the board, to educate and enthuse board members
Kay added, “We are not advocating for each and every company to appoint a CTO to their board immediately. But the direction of travel has been set and those who stand to benefit in the longer term are already planning how to make the most of technology today.
“The most significant changes driven by technology are yet to come. This may sound hard to believe when you think about the changes we have witnessed in the last two decades. But it’s the mantra boards have to live and make decisions by – or else risk missing out as the world transforms around them.”
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