How to govern technology risks and opportunities, and why provoking the board can yield results

(Sponsored article) With digital technology now one of – if not the – most prevalent forces shaping the modern business landscape, the way organisations implement, use, and manage it can define their very success.

It’s within this context that LexisNexis’s Managing Director Pacific, Greg Dickason and Google’s Vice President and Wesfarmers Non-executive Director, Anil Sabharwal, sat down to discuss the risks and opportunities presented by technology, and how businesses can effectively manage them at an operational and board level.

It’s important to note that the line between ‘legacy’ and ‘digital native’ businesses is now blurred and will soon be unrecognisable. All businesses are on the path to digital transformation, although some are further along than others. Similarly, all businesses are now in the position that technology will (if it’s not already) become a core part of their differentiation, a key driver of operational improvement, and ultimately the key to becoming a leading competitor in their particular space.

Of course the implementation of technology brings with it inherent risks – most notably those related to cybersecurity and the growing interconnectedness of digital business systems.

But where possible, Mr Sabharwal encourages boards and governance professionals to take a holistic view of risk.

“It’s not just about identifying the root, there’s a risk attached to not innovating, there’s a risk attached to not having a future vision, there’s a risk of not thinking 20 years in the future,” Mr Sabharwal said.

Weighing up the risks of technology against the future risks of lost innovation and lost opportunities is something all governance professionals must grapple with.

“I’ve spoken with CEOs who say when they’re having difficulty making decisions, they ask themselves, ‘what would Google do?’” says Sabharwal.

“They see Google as a company that’s always leading with innovation. But we have the same problems, we have multi billion dollar businesses that are going very, very well, but face competitive, disruptive risks. And we have to make those same, really difficult decisions as to whether we give up the certainty – that is, the financials and the revenue – in order to be able to build the thing that disrupts ourselves, rather than waiting for someone to disrupt us when it’s too late.”

To assist governance professionals in making decisions of this nature, Mr Sabharwal advocates an approach that could perhaps be classified as constructive provocation, a means of getting to the core of the issue by asking big questions.

“When it comes to risk, if I said to you ‘five years from now, our company is absolutely destroyed because of something digital related, what was it?’, and from there, the question is whether we’re really doing everything we can to mitigate it.”

The same thinking can be applied to business operations, to inform a trajectory for future optimisation.

“It’s about identifying who is leading in your space. They might be small, they might not yet be winning. But who’s doing the most interesting, compelling work in that space, and what are they seeing that you might be able to use to better enable your business?”

Most importantly, Mr Sabharwal advocates for continuity in addressing questions like this.

“From a governance perspective, these are things you should be asking at every board meeting, and ensure you’re having a real conversation around not just risks and mitigations, but also opportunities. To really have an effect, it needs to become a standing item in every board meeting.”

Please keep a look out for our forthcoming whitepaper about this topic.

Further information:

LexisNexis is a Gold Sponsor of Governance Institute of Australia’s National Conference 2021.

LexisNexis® provides a range of solutions that can support governance professionals with understanding their Australian based legal and compliance requirements, so they can keep on top of regulatory changes.

LexisNexis is part of RELX Group, a world-leading provider of information and analytics for professional and business customers across industries. LexisNexis helps customers to achieve their goals in more than 175 countries, across six continents, with over 10,000 employees.