Boardroom Strategies to Navigate Technological Change

Boardroom Strategies to Navigate Technological Change

An article by Associations Now highlighted a recent report from the National Association of Corporate Directors (NACD), which includes leaders from Toyota, Nielsen, and Harvard Business School, discussing the challenges boards face in adapting to technological change, particularly with the rise of generative AI.

Titled Technology Leadership in the Boardroom: Driving Trust and Value, the report emphasizes that many directors, particularly those who entered leadership roles five years ago or more, may not fully understand today’s technology-driven operating models.

Friso van der Oord, NACD’s senior vice president of content, states that these technological shifts are not just operational; they are redefining business strategies and models, affecting how value is created, and customer engagement is approached. Boards must strike a delicate balance between encouraging management to embrace innovation and risk while also managing those risks responsibly.

The article urges boards to cultivate “technology proficiency ” to effectively navigate this landscape. This doesn’t require deep technical expertise but an understanding of the implications of technological trends, possibly necessitating the formation of dedicated technology committees. With board seats being limited, directors are being pushed to be fluent in technology’s impact on strategy, business models, and the industry at large.

Boards should adopt multiple time horizons for strategic planning, considering potential changes over one, three, and five to ten years. Furthermore, integrating technology considerations into the evaluation and hiring of CEOs is essential.