Digital transformation is being led from most boardrooms by a fairly homogeneous board made up of men with the same cultural background. You usually have to use a torch to look for women, young people, people with different cultural backgrounds and people with a technical background.
How does the lack of diversity affect decision-making on the digital transformation? How come women, for example, have difficulty in finding their way into the boardroom? How important is it to bring more technical knowledge into the boardroom? And can the digital transformation succeed if there is not enough diversity and IT knowledge in the boardroom?
To be successful, digital transformation requires a better talent mix.
Artie Debidien, CIO, Managing Director, IT & Operations Director and member of advisory boards, and Antje Kuilboer-Noorman, Supervisory Director, Director, entrepreneur, lawyer, economist and acting Head of Legal Affairs at the University of Amsterdam, two women who have reached the top, explain their vision of the importance of diversity and IT knowledge for decision-making on the digital transformation.
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Debidien and Kuilboer-Noorman agree that IT knowledge is important. “The whole world is digital. That greatly influences the way we organise contacts with customers, for example”, says Debidien. “To innovate, you must not only carry out the paper process digitally from now on. The customer simply expects an organisation to do things differently compared with the past.” Debidien emphasises that the digital transformation involves more than digitisation. “The whole world is changing. As a company, you must make sure that your business strategy is aligned with the changes.”
To make good decisions about digital transformation, there needs to be sufficient knowledge of IT. According to Kuilboer-Noorman, this does not necessarily mean that all board members must have an IT background. “I don’t have a background in IT, but I have always familiarised myself with the subject. As a result, I have sufficient understanding of IT to be able to join in the discussion about it.”
Debidien, who does have a background in IT, concurs and adds: “Knowledge of IT is very important. Although it’s obviously not necessary for everyone in the boardroom to have a technical background, it would be good for the CIO to have a place on the board. The CIO brings to the table some very essential knowledge to improve strategy and operations proactively.”
Kuilboer-Noorman regards IT knowledge as pivotal to being able to ask the right questions. “Sometimes I see that a board does not possess sufficient knowledge. You notice that because the right questions are not being asked. That knowledge is really required in order to get good, organised counterarguments. What you see is that organisations sometimes simply can’t cope with certain processes.”
In addition to knowledge, Debidien considers an open mindset particularly important. “To be able to make sound decisions about digital transformation, you must be open to the changing world and be able to interact with it creatively. Proactive CIOs make an impact on both sides of the balance sheet: reliable and streamlined operations on one side so as to lower the revenue-cost ratio, but digitisation and new business for top line growth on the other side. Board and business can still grow in absorption and adoptive capability when it comes to innovation and growth by using technology. Organisations that recognise the importance of technology to their corporate strategy tend to position CIOs at board level.”
Kuilboer-Noorman is not surprised that many boards are composed homogeneously. “It’s just easier in the short term. It’s easier to reach a decision with a group of people who are alike in terms of background and age. It has advantages at times of crisis and acute pressure.” But she notes that, in the long term, a homogeneous board does not deliver the best results.
On boards where there is a representation of young and old men and women from different backgrounds, you see that people look at things with a far broader perspective. That’s essential for creating value.
Kuilboer-Noorman: “The advantage of young people is that they can look at things without baggage. A fresh way at looking at things is very valuable. What’s more, young people have far greater knowledge of the new ways of working and organising, and that too is very valuable knowledge.”
Debidien would also like to see boards with a more diverse composition. “I see no reason why young lateral thinkers should not join a board. Not enough attention is being devoted to people’s potential. If boards are receptive to active creation, collaboration, challenge and coaching, they will automatically select people with diverse and complementary profiles. This works, and there are already some good examples. Entrepreneurial CEO’s, such as Marco Keim, Frans van Houten and Tex Gunning choose women as CIO.”
Debidien observes that change and entrepreneurship are important for a company to stay relevant. “In practice, you see that entrepreneurial personalities are not considered for management board positions. Most directors have a behavioural style that leans towards maintaining stability and avoiding risks. It hinders innovation, digital transformation and experimenting with new business models.”
The discussion about women in supervisory boards recently flared up again in the media. The Social and Economic Council of the Netherlands (‘SER’) now states that there should be a female quota for listed companies, so that in due course women will account for 50 percent of board members. The SER further wants the largest companies in the Netherlands to start working actively on getting more women and people from different backgrounds higher up in their organisations.
Perhaps a temporary quota might be a good way to getting more women on the boards.
Debidien and Kuilboer-Noorman both used to oppose a female quota, but they have changed their minds. Debidien: “I am a woman with an ethnic background and self-made, so I always thought that if I can get this far, anyone can do it! Unfortunately, in reality it’s not that simple. That’s why I think a temporary quota would be a good way of turning the tide. My estimation is that the first women or CIOs in the boardroom will exhibit many similarities with the current profiles in the boards. This will clear the way for authentic, complementary professionals.”
Kuilboer-Noorman agrees that things are moving too slowly. “Apparently, there is not enough pressure on companies. In the past year, men again accounted almost exclusively for all appointments at listed companies. The time has come to stop talking about it and to simply get on with it.”
The time has come for women to start taking action themselves.
Besides a female quota, they say it’s time for women to take action themselves. Kuilboer-Noorman: “Make yourself available for a board. Lots of people are wanted. It does not immediately have to be at a listed company. Consider joining the board of a school or a housing association, for example.” She sees her own management experience as an enrichment of her personal development. “You learn to reflect more, to oversee, to ask questions and to look critically at an organisation and at yourself.”
This article written by Maaike Verschuren, Tech Editor,
and published in the latest edition of our Magazine.