Rob Wilder, Country Chair of Korn Ferry Ireland, discusses the Korn Ferry 2018 Ireland Board Index, the tech skills gaps amongst directors, and the importance of addressing these challenges in an age of tech innovation.
Ireland’s desire to become a global tech hub faces considerable challenges. Infrastructure, a housing crisis and, most of all, an increasingly apparent skills shortage.
As companies in all sectors become increasingly aware of the role that is now played by technology, the need for tech expertise at board level has never been more apparent.
Despite this, the Korn Ferry 2018 Ireland Board Index revealed a stark under-representation of digital skills on Irish boards.
While skill requirements will differ from board to board, identifying potential gaps is essential if the board is to advise, challenge and support the executive team, particularly the CIO, to the best of its ability.
Tech skills shortage and how to address it
The first of its kind, this Board Index studied 45 FTSE 100 and FTSE 250 equivalent ISE firms between 2007 and 2017.
The findings are startling – just 1 in 20 (5%) directors had a background in technology. Even more suprising is that this reflects a miniscule 3% rise within the last decade.
Despite Ireland’s growing reputation as a global tech hub, the demand for technology fluent directors significantly outweighs supply. From incumbent organisations, striving to counter the disruption within their industries, to born on the internet multinationals, everyone is fighting to attract experienced technologists. the lack of technologically fluent directors in Irish boardrooms is concerning. However, it reflects a growing international issue within an Irish context.
Irish boards need a skills rejuvenation to reflect its growing tech industry. Only by addressing these skills gaps can Irish organisations ensure top deliverance of solutions from their boards, and in turn top performance.
Why do Irish Boards need to address the tech skills gap?
Companies need to grow more aware and address the above skills gaps. By doing so, Irish boards can ensure organisational accountability and competitiveness in Ireland’s saturated market.
Chairman of Paddy Power Betfair Plc, Gerry McCann, points out “directors need to be capable of asking the right questions to management, to make credible inputs into the strategic direction of the company”.
Just as the CEO and CFO must be quizzed and challenged, so too must the CISO, CIO and CTO. Today’s CIO isn’t just focused on keeping the lights on. They’re charged with adding tangible value to their company. However, their potential to positively impact will always be limited if there is a lack of support and understanding for what they do.
In an age of increasingly harmful cybersecurity threats, digital consumerism, as well as new innovations such as AI technologies, it is now crucial that Irish boardrooms are equipped with the skills to oversee the opportunities and threats of the organisation’s technology-driven initiatives.
Perhaps the most attractive benefit – from a shareholder’s perspective – is technology’s ability to create new revenue streams, streamline operations and establish a competitive market advantage.
For boards with limited tech expertise, it’s common to see a more defensive organisational approach to technology. Conversely, those that boast greater tech experience tend to be more offensive, proactively involving the CIO in board meetings and supporting digital solutions that may improve the company’s position.
How can Irish Boards bridge these tech skills gaps?
As former Chief People Officer of AIB Group, Orlagh Hunt remarks, “executives need to understand their changing environment, challenge the assumptions of their operating teams, and relentlessly innovate”.
Irish boards need to evaluate the digital and technology experience that they hold, and bridge significant gaps that have formed within higher levels of their organisation, less they be consumed by their more digitally adept competitors.
Widen talent search pools to increase tech skills
By widening their talent search pool, boards can ensure that they attract the right skills needed for their organisations, as well as grow in board diversity.
Geographically, Irish boards can widen their nets, seeking out talent from across the water, in the UK, mainland Europe and further afield.
Easing the experiential requirements of an incoming technology director can also help boards in adding greater depth to their boards. The rapid rise of technology is reflected in the younger profile of IT directors. In order to circumvent the tech skills gap, Chairmen may need to focus more on the sector experience of candidates, rather than their boardroom history. An additional consequence of this is the promotion of age diversity, as younger directors bring different perspectives to their older peers.
Boards face consequences if action isn’t taken
If Irish boards fail to appoint more directors with a strong suit in technology, this could have worrying consequences in a future that is increasingly being shaped by technological trends.
Boards will risk an inability to hold their executive team to account regarding their technological development, while organisations could face a deterioration of performance and competitiveness in an increasingly globalised market.