Aussie CIOs half as likely to get a seat on the board

May 13, 2011 1:09 PM
Filed under Strategy

Report: Disconnect between business and IT leaders.

CIOs are only half as likely to be offered a seat on the board of Australian organisations as their global peers, according to a survey conducted by Ernst and Young.

The survey of some 869 C-Level executives, 50 of which were based in Australia, found a disconnect between business and IT decision making within most large organisations.

Only 13 percent of Australian CIOs surveyed were offered a seat on the company board, versus 28 percent globally.

Only around one in four Australian executives felt that they had a good idea of how IT could transform their business or a complete picture of how IT budgets are spent, versus 36 percent and 42 percent globally.

Those budgets aren’t necessarily growing, either. The survey found that only 42 percent of the 50+ Australian organisations had allowed the CIOs a higher IT budget over the last 12 months.

“More than ever, Boards, CEOs and their executive teams need a solid understanding of IT and to have in place skilled, capable teams that can help them deliver growth,” said Ernst and Young advisor Mike Emmett.

“Technology is embedded in almost every business process. It is at the core of a company’s cost centre, and in particular sectors is inextricably linked to productivity and a company’s core value proposition.

Emmett said the boards of Australian companies require a greater diversity in terms of skill sets, but it was up to CIOs to put their hand up.

“CIOs must continue to widen their lens to include more than just a focus on IT and become a true business partner,” he said.

“In particular, IT is expected to provide essential data management to help analyse markets and customers and focus on profitable segments.”

Should CIOs have a seat on the company board? Share your view below.

Aussie CIOs half as likely to get a seat on the board

5 comments in this discussion

"Great insights folks, thanks."

By BrettWinterford

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Comments: 5

BaysNet May 13, 2011 2:31 PM	Let's juts stick to our knitting and run the business. Get the CIO off the board and push all the business systems into the cloud and get a middle management SME project manager to manage the contract and SLA reporting.
trance1937 May 13, 2011 2:54 PM	Not necessarily so if the company board is properly constituted. Companies, and the elected/selected, board members (if any), should be appraised of the IT involvement required for their particular enterprise. If they are not, education is indicated. The skill-set for competent IT practitioners may not be suitable, or essential. This is not uncommon. If an existing member of a board has the ability, and the appreciation of the issues, the impact of IT on current or projected activities will emerge at its appropriate level in the scheme. This does not require full-time IT in-house consulting, rather it means co-opting the IT individual for specific IT briefings or projects. IT itself may, or may not, be in the mix of major tasks for some enterprises, and there is a significant range of activities for directors in a typical mid-sized company. IT is usually not the dominant pursuit. Most boards seem to need only part-time IT overview. The equivalent of the company secretariat level of participation could work well. This does not mean that prospective board members who also have a stong suit in current IT, should have that ability taken lightly. However, recency (of direct involvement), in an IT sense has a different meaning than simply having a past or a passing familiarity with outdated processes. Horses for courses seems likely to apply.
Ace May 14, 2011 1:23 AM	Getting IT savvy people to board level quality is probably a challenge, and maybe the figures indicate that companies need to invest more time & money into management training of IT leaders. It sometimes seems to me that many boards still consider IT a necessary evil rather than a core business driver. This may be a throw back to the 80s and 90s when business leaders were dictated to by IT departments. However, it is probably time to move on.
Francis May 16, 2011 9:05 AM	As a former Director of a small to mid sized company and for a while a corporate Mr Fix It, I have seen a number of problems such as this first hand. The major problem being that board members are often chosen for the wrong reasons or because they were part of the old boys club. Two companies in particular that I was asked to investigate had small to mid sized main frames. In the case of company number one they used their computing facilities to manage their financials but there was no data on the system for the manufacturing side of the business. The result was they did not know how many widgets the made or in what size groupings. So when I needed this information to complete my assignment the data in the form of hand written notes in Manila folders had to be gathered from four manufacturing centres in three states and manually collated. Company Number Two had a good Manufacturing package on their system but it was not properly maintained causing conflict between the manufacturing and accounting sections of the company, this prompted the senior management of the company to call me in to get to the bottom of the companies problems. In both cases if there had been a proper appreciation of the importance IT skills and leadership these situations would not have arisen. The very reason that they occurred in the first place was that there was not enough understanding of systems and what IT could provide in the overall running of the companies concerned. Obviously there was a failing in the appreciation of what IT could deliver in the proper running of each of the companies concerned, but the next question to be asked is why? The answer is that at board level they did not understand the importance of IT in the overall running of the company and so it was treated simply as a toll to be used rather than a pillar of the organisation itself. To overcome this problem IT must do more to broaden its horizons and promote itself while at board level there needs to be a deconstruction of the old boys network and a wider understanding, not only of IT but all parts of the organisational structure and how each piece fits in the jigsaw that makes up the entire company. Unfortunately until this happens nothing much will change. As a footnote I would just like to say that I come from an engineering background with some engineering IT skills.
BrettWinterford May 16, 2011 9:39 AM	Great insights folks, thanks.