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Technical failure: New report shows boards ill-prepared for post-COVID digital world

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Despite a rapid technological acceleration caused by the pandemic, many leaders remain under-skilled and are struggling to keep up with a fast-changing digital landscape, a new report released by Governance Institute of Australia has found.

The Driving the digital revolution: A guide for boards report found more than half the respondents have few, if any, directors with technology skills as part of their core skill set, highlighting the need for significant board renewal and upskilling in order to fill the digital skills gap.

The report also found 21% of organisations do not have a digital transformation underway, and more than half of the respondents have few, if any, directors with technology skills as part of their core skill set.

Of those with no digital transformation underway, 40% said it was not a priority, and 25% said it’s because they don’t have the required skills. Digital transformation is essential in a world where every business is a technology business.

The report’s findings are based on a survey of 481 CEOs/ C-suite executives, non-executive directors, senior governance and risk professionals, and a working group of digital experts, including NSW’s Chief Data Scientist, Ian Oppermann.

“Senior managers need to prioritise digital as a matter of urgency”, Governance Institute Chair, Pauline Vamos says. “While many organisations are on track with their digital transformation, many are not, and this is concerning because inaction can lead to some businesses becoming severely compromised or obsolete”’.

A member of the report’s expert working group and NSW Chief Data Scientist, Ian Oppermann, echoed these sentiments: “If your board director cannot participate in the conversation because they have no grounding whatsoever [in technology] then you’ve really lost access to a real asset.”

Cyber security and cyber attacks are considered the top technology risks for survey respondents, both now and in 2030, closely followed by data management.

And while these concerns are regularly confirmed by a growing number of largescale cyberattacks, boards must also be mindful of the potential damage an insidiously silent piece of malware, such as keyloggers—a form of spyware—can have on their businesses and customers.

Ms Vamos said that Australia is now at a point in the digital revolution where aggressors are often vastly more digitally savvy than the boards charged with governing organisations.

But solutions are at hand and Chief Information Security Officer at Origin Energy and member of the report’s working group,, Christoph Strizik, said increasing board diversity is a powerful piece of the solution.

“By appointing younger board members with very different backgrounds and experiences, boards as a whole will upskill naturally,” Mr Strizik said.

Lead Research Specialist at Diligent Institute and member of the working group, Kira Ciccarelli, agreed.

“The drive for greater overall diversity at board level will help to improve the board’s digital skills because directors from underrepresented groups are less likely to have taken a traditional route to the boardroom,” Ms Ciccarelli said.

Key findings from the report include:

  • 41% say less than a quarter of their board members have technology skills as part of their core skill set, and 13% have no directors with digital skills
  • 21% of respondents have no digital transformation underway at their organisation
  • Only 33% say their digital transformation involves strategic innovation and adaptation.
  • 46% rate their organisation average or poor when it comes to data management, an element considered crucial for an effective digital transformation
  • 93% say the board should be involved in technology issues, but 34% say their board is not dealing competently with tech issues, 47% say this is due to a lack of tech skills and education among board members

A roadmap for boards to drive the digital revolution

  • Embrace digital: it’s good governance to undergo a digital transformation
  • Define your strategy: know what digital transformation means for your organisation
  • Innovate: make sure innovation is at the heart of your digital strategy
  • Upskill: make sure you have the right mix of technology skills around the boardroom table
  • Focus: establish a board-level technology committee to oversee your digital transformation
  • Discuss: make digital transformation a standing agenda item for each board meeting
  • Don’t fear cyber: keep cyber risk and mitigation processes under constant review to build the board’s confidence
  • Get on top of data: establish data management systems to mitigate risk and facilitate your digital transformation.

Download the full report

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