Appointing younger directors isn’t the only answer to improving digital knowledge in the boardroom
Digital is transforming the way businesses and societies operate. It is also bringing increased complexity that requires new knowledge and is changing the nature of decision-making.
It’s easy to see why this means there are rising calls to increase age diversity within boards. Currently, the average age of directors is still over 60, and it’s widely acknowledged that this has led to a digital knowledge gap. The assumption is that this needs to change if organisations want their boards to challenge the status quo, introduce more disruptive thinking and improve understanding of digital strategies.
However, it would be wrong to say that improving age diversity is an easy or completely satisfactory solution.
Firstly, recruiting younger, digitally-minded board members is a difficult fix to apply. The best candidates are in exceptionally high demand right now and difficult to appoint.
It can’t be taken for granted that younger people want to sit on boards. Many want to pursue their own business interests first and feel they need to develop more experience before they take a board position.
It is also not enough to recruit one or two new directors and hope that their knowledge spreads throughout the board. Generational differences between new, digitally literate directors and more established non-digital natives mean this is unlikely to happen naturally.
What’s really needed is more balance. There needs to be recognition throughout the board that digital is no longer an option, can create significant business value, and requires a different set of governance controls.
A better approach, therefore, is to complement efforts to recruit younger board members with a drive to increase understanding of digital issues and risks among existing board members.
In our latest eBook, 3 steps to accelerating digital literacy in the boardroom, we explore how you can achieve this in detail. In particular, we look at how organisations can:
- Define what all board members really need to know
- Implement immersive training programmes
- And introduce digital ways of working at board level to further enhance understating and knowledge exchange
The key thing is to make sure that such efforts are focused on the business implications of digital — and don’t become bogged down in how technology works.
There is strong evidence to suggest that this approach achieves the right result. McKinsey recently reported that it spoke to 75 board members who completed immersive digital training and found that more than 50% insisted on making transformation the top agenda item for the business as a direct result.
While increasing diversity of all kinds should remain a key objective for boards in the long run, this is the immediate short-term result that boards and managers really need to achieve.
Download the eBook: 3 steps to accelerating digital literacy in the boardroom