Enterprise boards of directors face increasing pressure to manage digital transformation, cybersecurity, artificial intelligence and new technologies. However, many board members have no background in technology, which complicates their ability to ask the right questions and determine where their attention should go.
But while technical knowledge is not a requirement for good governance, it does require sound judgment and a willingness to ask difficult questions.
A Useful Seven Steps Checklist
1. Make sure the digital strategy meets the business objectives
Any major technological investment should bring about measurable business results, not just provide the company with an opportunity to use the newest technology.
2. Find out what the key digital risks are for the company
The board should monitor the cybersecurity, and risks related to AI, data privacy and operation on a regular basis rather than do it after something happens.
3. Find out the value of the investments, not just how much they cost
The amount of money spent on technology is important, but the board should also know how these investments improve the customer experience, efficiency of operations or the company’s competitiveness.
4. Review AI governance on a regular basis
With the growth of AI usage the boards must be certain that sound policies and rules are in place with accountability and ethics being ensured.
You might also be interested in: Digital Transformation Roadmaps
5. Foster cross-functional collaboration
Successful digital transformations depend on cooperation of business, technology, risk management and operation leaders. Governance must reflect this.
6. Keep track of changes in regulations
The digital regulations are rapidly evolving, and it is crucial to know about them in advance, so as to be ready to changes.
7. Make continuous learning a part of the agenda for boards
With technology changing so rapidly, having just a few short lectures before the board meetings can help board members make better decisions.
Good Governance Is an Ongoing Matter
There is no simple checklist guaranteeing good governance. Each company has its unique risks, needs and opportunities. However, the practical guidance given above will help make the process of governing more effective. Today’s boards should not only give their approval only for technological investments, they should also know the right questions to be asked and have their understanding of things challenged.
