Find your space in the boardroom

As IT gains strategic importance, more IT directors are earning a seat on the board. Julia Vowler reports.

As IT gains strategic importance, more IT directors are earning a seat on the board. Julia Vowler reports.

A seat on the board is held to be the ultimate in corporate success - the pinnacle of the climb to the top. For IT professionals to make it to such heights, they must quickly acquire some new skills, experts say.

"If IT directors are coming on to the board they need to think differently," says John Weston, head of development at the Institute of Directors which is training an increasing number of IT professionals in board-level management.

It is important they understand that at board level they will exert collective responsibility for the company. In the wake of Enron and WorldCom, this is something that has increasing prominence, he says.

"We are seeing more directors taking their career and professional development more seriously, so that when they join the board they don't just think, 'Wow, I've been promoted', they think in terms of their new exposure," says Weston.

Seeing former captains of industry led off in handcuffs is a sobering reminder that corporate power brings real corporate responsibility.

"You need to gen up quickly about your responsibilities and liabilities, how the board is structured and get a quick grasp of the issues facing the company," Weston says.

Every company is unique, so newly appointed board members should make every effort to get as much understanding as possible about their company's big issues, and how their particular board operates. Even if a senior manager has had experience of presenting to the board, they are usually in and out so fast they get little chance to experience what a board meeting is really like, says Weston.

As well as speaking to the chief executive, chairman and non-executive directors, above all talk to the company secretary, he says.

"They are the 'legal guardians' of the board, and one of the few 'must have' positions. They organise the minutes and understand the legal composition of the board, what its powers and responsibilities are," he says.

When it comes to corporate malfeasance, the excuse "it was my first board meeting so I just agreed with everyone else" may not be much good, says Weston. "Once you sign Form 288 from Companies House saying you are a director, you are liable."

As IT has become key business enabler, Weston has seen a growing number of IT directors and senior managers go through the institute's courses.

"It is a definite upward trend," he says. "Five or six years ago it was a rare animal to come through to the board from IT."

The reason for the change is quite clear, he says. Chief executives are increasingly recognising that IT is of strategic importance to the company.

"It is when IT starts to be recognised as strategically important to survival and growth that the IT director becomes a board position," says Weston.

The Y2K problem and the rise of the internet have seen to that. Instead of being the responsibility of the finance director on the grounds that IT required large capital expense and was a cost-centred drain on resources, "when IT arrives on the board it says, 'we are a business driver', the way marketing is," says Weston.

But it needs to say that loud and clear - not something, in Weston's experience - that heads of IT are always very good at.

Coming out of IT on to the board, "they are not as vocal and assertive as, say, those from sales and marketing," says Weston. "Nor do they always have the self-assurance of accountants who understand the numbers."

Although a clever chairman should draw out those less vocal, that may not always be the case, so the newly appointed board-level IT director needs to be prepared to speak up. When they do, they may well have a lot to say, says Weston. This is because IT directors have an invaluable advantage of having seen across the entire spectrum of the organisation.

"IT directors have a unique insight into the business," he says. "They will see more of the big picture [than other function heads], they will have seen behind the scenes - they are uniquely placed to understand all the organisation's processes."

But becoming a board-level director is very different from being a manager, however senior, says Weston.

Former IT director, Rene Carayol, now a business guru, agrees and warns that many heads of IT are unprepared for the difference.

"I was head of IT for 10 years and on the board for five," he says. "You get to the board with a functional expertise, and find it is irrelevant. Only when you get to the board do you understand what strategy is, what making money really means.

"IT directors are used to being service providers, not revenue generators. [On the board] you have to understand profitability and the ability to make money," says Carayol.

Tips for IT directors moving on to the board
  • Do discover your legal responsibilities for corporate governance and understand your personal exposure

  • Don't think you can restrict your responsibility to your functional department - you now have collective responsibility for everything the company does

  • Do be prepared that your legal responsibilities start with signing on as a director. There is no "running in" grace period

  • Do gain as rapid and comprehensive an understanding as possible about the strategic direction of the company

  • Do talk to the company secretary to understand the constitution and powers of your particular board and the memorandum of association

  • Do come to meetings with a clear understanding of board-level financial jargon

  • Do strive to map out the "politics" of the board - a good chairman should control board members, but this does not always happen

  • Don't underestimate the breadth and value of your overview knowledge of the company's processes that being head of IT will have afforded you

  • Do be prepared to be vocal right away, however difficult IT professionals may find that

  • Don't let yourself be used as the personal IT help desk of the other board members

  • Do be prepared to take up formal training for new directors, such as Institute of Directors courses

  • Do expect to operate at a strategic level hereafter, though you will also have to simultaneously be a department head as well. Your first loyalty is to the company, not your department

  • Don't let board meetings decay into territorial battles or dissipate into concerns over operational management rather than strategic direction.

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