TheCorporateCounsel.net

Yesterday, the NACD announced a new “Blue Ribbon Commission” report to assist directors with overseeing the strategic opportunities & risks of rapidly evolving technologies. If you’re advising boards, be on alert that this may prompt questions and/or projects. The Executive Summary articulates the factors driving “technology governance” – and provides 10 recommendations for boards:

Strengthen Oversight

1. Upgrade board structures for technology governance.

2. Clearly define the board’s role in data oversight.

3. Define decision-making authorities for technology at board and management levels.

4. Ensure trustworthy technology use by aligning it with the organization’s purpose and values.

Deepen Insight

5. Establish and maintain necessary technology proficiency among the board.

6. Evaluate director and board technology proficiency.

7. Ensure appropriate and clear metrics for technology oversight.

Develop Foresight

8. Recognize technology as a core element of long-term strategy.

9. Design board calendars and agendas to ensure appropriate focus on forward-looking discussions.

10. Enable exploratory board and management technology discussions.

It’s worth noting that at many companies, the strategic importance of technology is one of the factors influencing board refreshment. The Spencer Stuart 2024 Board Index reports that technology/telecommunications was the most common industry background of new directors who joined S&P 500 boards this past year. That said, while it’s helpful to have a “tech director,” they typically aren’t “one-trick ponies” – and the full board (or a committee) still has oversight responsibility. NACD’s toolkit (for members) includes resources on evaluating director technology proficiency and assessing technology governance.

– Liz Dunshee