Despite a rapid acceleration in the use of technology caused by the pandemic, many leaders remain under-skilled and struggling to keep up with a fast-changing digital landscape, a new report has found.
Released by Governance Institute of Australia, the report Driving the digital revolution: A guide for boards found 21% of organisations do not have a digital transformation underway, and more than half 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% say it’s because they don’t have the required skills.
Governance Institute Chair Pauline Vamos said boards and senior managers need to prioritise digital as a matter of urgency or risk their organisation becoming obsolete.
“While it’s great to see many organisations are on track with their digital transformation, a significant number clearly are not and this is concerning,” Ms Vamos said.
The report’s confirmation of a skills shortage has drawn a line in the sand on the need for a board skills renewal, Ms Vamos said.
“Governance Institute is calling on organisations to seriously consider some significant board renewal in order to fill the digital skills gap. As a director, you don’t need to be a tech expert, but you need to understand enough to ensure you are part of the conversations that matter.”
The report’s findings are based on a survey of 481 CEOs/ C-suite executives, non-executive directors, and senior governance and risk professionals, as well as a working group of digital experts including NSW’s Chief Data Scientist, Ian Oppermann.
Key findings 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
- The top technology risks to organisations are cyber security and cyber-attacks (62%), then data governance (49%) and staff technology skills/ knowledge (48%) – respondents could select multiple options.
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 HERE