I probably field more calls and e-mails from CIOs interested in getting on corporate boards than I do on any other topic. I’m a nice person (no matter what anyone says) and I like to be encouraging. Unfortunately, my answer to the “How do I get on a board?” question is always the same: “You want to get on a board? Don’t be a CIO.”
Very few corporate boards ask CIOs to join their club. In fact, I was recently speaking with an executive recruiter friend who runs a practice focused exclusively on board placement. He told me that in more than 30 years of recruiting, never once has he been asked to place a CIO.
This, in my opinion, is an opportunity missed. We all know stories about how an enterprise resource planning (ERP) implementation run amok has brought a company to its knees. Conversely, we’ve also heard about how an IT innovation has given a moribund company a new lease on life. How can it be that corporate boards fail to see the value of the CIO perspective?
Shunning the CIO
Not to be ageist, but most boards are populated by people in their 60s. People in their 60s are (for the most part) uncomfortable with technology. CEOs like to be the smartest people in the room and, whereas they usually understand sales, finance, and marketing, they tend not to get the technology thing. And their own experiences with technology probably don’t help much. Regardless of all the good IT may have done for their companies, they’ve doubtless had at least one bad IT experience (everyone has), and that colors their perspective, darkly.
Another contributing factor to the dearth of CIOs on corporate boards is boards’ understandable preference for P&L leaders: people who know money and how to make more of it. With a limited number of seats around the table, CEOs prefer to give them to the money makers — and, of course, to important customers they’d like to keep close.
Finally, CIOs just don’t run in the same circles as board members. New board members often come via referrals from other CEOs and, apart from their own bosses, CIOs typically don’t know a whole lot of CEOs. New board members also come from formal executive searches, where CIOs have not made great inroads outside specialized CIO practices.
So those are some of the reasons CIOs have been and still are rare birds on corporate boards. But they’re all bad reasons. Here are five good ones for why they should be included.
Five Reasons Why a CIO Will Help Your Board
- Risk Management. Boards always talk about risk and they typically delegate the work to audit or finance committees. But risk has taken on a new meaning in our current technology environment with security, privacy, and compliance all deeply embedded in the IT organization. As these issues grow increasingly complex in the cloud, it’s becoming more difficult for auditors to understand (much less explain) what the company is doing and how they’re doing it. CIOs will understand what IT is (or isn’t) doing to comply with new regulations, and how it’s securing the network and protecting customer information. Boards would benefit from someone they can ask, “Explain to me, Mr. CIO, how you categorize your risks, how you think about them, and how you go about managing them. What are the execution plans behind that management?”
- Crisis Management. I know countless examples of companies that have been plunged into crisis due to IT failures: a $100 million global ERP implementation gone horribly wrong; an e-commerce business’s website down for days, incurring huge revenue losses; a cloud provider suffering a breach that exposes customer data. Wouldn’t a board member with IT crisis management experience be helpful in these scenarios?
- Diminishing Supply of CEOs. With the economic volatility of the past several years, CEOs have to deal with problems at their own companies. They often do not have the bandwidth they once had to attend to someone else’s issues. Board work is time-consuming, and companies increasingly want their CEOs home and focused. CIOs represent a new, enthusiastic supply of leadership talent.
- Diversity Is Good. Boards often solve their “executive supply-chain problem” by appointing CEOs who have recently retired. But this produces a bunch of directors who will put all their “Type A” leadership energy into the board, and they can wind up with too many chiefs around the table and a board that doesn’t play well together. If you look to senior management teams as a model, you’ll find a blend of CEOs, P&L leaders, and functional heads. And it is the functional leader, whether the CIO, head of human resources, or head of legal, who tends to be most collaborative. What works for an executive committee can work wonders for a board.
- CIOs Have the Broad View. My favorite phrase lately is: The CIO is at the nexus of all things. There is no part of the business that the CIO does not know intimately. In fact, the CIO may be the only executive in a company who sees a business process from conception through execution. So, almost by definition, a CIO understands the company as well as anyone. That’s a pretty powerful perspective to have on a board.
With risk on everybody’s mind, with boards reevaluating their needs, and with technological innovations remaking business processes almost on a daily basis, now is the perfect time to nominate a CIO for your next board appointment. Or you can sit back and continue to neglect the governance of IT, which is probably your biggest expense. With enough time and inattention, it could also become your biggest business and competitive liability.