Should the CIO report to the CEO?

 

Comment: If you want that direct line, justify it.

Contrary to popular belief, a minority of CIOs report directly to their CEO today, and in most cases, it's not even preferable.

There is no "one size fits all" solution to deciding whether the CIO should report to the CEO. The combination of factors will be unique to the firm and the individuals.

CIOs who report to CEOs do so as a result of specific organisational design needs, not generic role entitlement.

Gartner's annual large-scale survey of CIOs in larger organisations shows that most CIOs do not report to the CEO.

This year's survey found that globally, a minority of CIOs (38 percent) report directly to their CEO today.

This situation has remained remarkably consistent over the period in which this question has been part of the annual survey.

The Asia Pacific survey results are similar. Forty percent of CIOs in this region report to the CEO, 14 percent to the CFO, 16 percent to the COO and a significant 30 percent state that they report to the ubiquitous "other".

Gartner is often asked whether the CIO should report to the CEO.

There is no simple answer or magic formula. Each situation must be determined according to the particular circumstances of the organization and the individuals concerned.

Some CIOs may aspire to a CEO reporting line as a way to get more visibility for IT and attention to key decisions about its utilisation.

In that case, a seat at the operating committee table or membership of the strategic planning committee may suffice.

A direct-line reporting relationship of CIO to CEO suggests more frequent contact, a pair working on specific business problems, trust building or personal development is required.

However, it's not preferable that CIOs report to CEOs in all cases or by default.

Even if a CIO performs his or her operating role very effectively, a direct reporting line is not an entitlement.

CEOs will usually be advised by their boards not to let their personal span of control (total number of direct reports) become too broad.

This is partly because, to be effective in the role, the CEO must also spend so much of his or her personal time looking outward from the firm to investors, customers and business partners. So, the CIO role must justify its occupancy of a direct reporting line.

Some specific situations where a direct reporting line may be warranted include:

  • Where the company and industry is highly information-intensive (for example, banking and media) or moderately information-intensive (for example, services such as travel and retail)
  • While a technology-dependent business model or company transformation is under way — for example, merger and acquisition process integration
  • While a heightened state of information-related threat or risk is in play — for example, cyberwarfare, industrial espionage, regulatory compliance or information-intensive business volatility
  • Where the CIO also has another C-suite role — for example, COO, CFO or head of shared services
  • Where the CIO role is a career development step or succession-planning action toward a future role as the next CEO, COO or CFO

 

If there are good reasons like these, there may be cause for the CIO to be considered for a direct reporting relationship to the CEO.

If none of these situations apply, the case is likely to be weak.

We expect the CEO reporting proportion to grow, modestly, and recommend that the CEO should review the CIO's reporting line biennially, at least.

Mark Raskino is a vice president and Gartner Fellow in the Executive Leadership and Innovation group of Gartner Research.

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