People tend to have longer careers these days. They live longer, they have less faith in retirement plans, and they want more material possessions later in life. What's more, those who have reached top executive-level positions have more trouble giving up their professional identities after several decades of work. Besides, why quit when you love what you do?
A good way for executives to extend their careers is to take on board positions outside their companies. After spending 20 years rising to a lofty position, it's natural to want to take on one or more non-executive director (NED) roles.
NED roles are of interest to an increasing number of CIOs — and some companies are looking specifically for tech talent to sit on the board. Since IT is transforming most industries, forward-thinking organisations understand the need for IT-savvy directors to help them navigate unchartered waters.
Such an arrangement is attractive from the CIOs perspective, since NED roles can enhance a career. They are a great way of networking at a high level; and they are a great way of increasing one's general understanding of what's happening in other parts of the economy.
All three parties may benefit
According to Phil Pavitt, former CIO at Aviva, having a CIO in a NED role can be a win-win-win situation. Pavitt says: "It's useful for the CIO, for the company where the CIO holds the non-executive director role, and for the CIO's company. All three parties gain new insights, they're exposed to new levels of strategic thinking, and they benefit from the different perspective."
On how CIOs benefit, Telefonica Group CIO Phil Jordan says: "It's difficult to really know the impact non-exec can have on a career because the opportunities tend to come quite late in a career journey and once an external profile and reputation has already been established.
"Where it has been extremely useful for me, and others I am sure," says Jordan, "is to allow a CIO to broaden his or her perspective, and to learn from others. You get a degree of intimacy of a business you don't get from peers or industry references. The non-executive director positions also allow you to build networks outside of your own industry sector."
Pamal Sharma, Head of IT at Fujifilm UK, holds a similar view. According to Sharma: "It's up to CIOs themselves not only to pay attention to what's happening in their business, but also what's happening in other businesses. You can aim to be the best at a given aspect of IT in your own sector, but that's not enough. You really need to be the best across sectors. You need to benchmark yourself against the best, not just the best in your sector.
"One of the ways of doing that," says Sharma, "is to be aware of what's happening in other businesses and industries; and a great way to stay abreast of what's happening is for CIOs to have non-exec positions in other businesses outside their own sectors."
Why would a company look for a CIO in a NED role?
Phil Jordan says: "The reason for appointing a Non-Exec from a CIO background — and the value derived from that — is entirely dependent on the business and the particular CIO. It can range from helping the other board members understand their own IT strategy, plan, and results, to offering independent advice on the future direction of technology in the company.
"There is no doubt in my mind that the digital revolution is causing more businesses to look for external and non-exec support in IT; and this is positive for the CIO community, and for the influence of IT Leaders in businesses generally."
But headhunter Cathy Holley adds a note of caution. Partner and co-head of Boyden UK's CIO practice, Holley says: "Putting an outside CIO on the board has to be done very sensitively. Most companies already have a CIO. If you were that CIO, you would have to ask yourself, if your company put another CIO on the board, how would that make you feel?"
What about for the CIO's company. How is the NED role useful to them?
According to Phil Jordan: "There is a lot of value in any CIO with a broader cross-industry perspective, learning and applying best practice and being able to reassess their day to day challenges with others is useful and cathartic. I also feel that the CIO's company should get value and credibility in that their CIO has a value in the IT industry that transcends their own business. This must be good for both the company and particularly the IT function led by the CIO."
What boards look for in a CIO
Before a CIO looks for a role on the board of another organisation, he or she should first be on the executive committee of his or her own organisation. As Cathy Holley says: "Another company will look at that person and think that if your own company, that knows you inside out, doesn't want to put you on their exec committee or their board, why would we? What value would you be bringing?"
The good news is, things are looking up for IT leaders. The 2014 CIO Survey conducted by Harvey Nash, with more than 3,200 CIOs and technology leaders participating globally, found that around 32% of the CIOs report directly to the CEO — more than the number who report to the CFO (18%), and more than the number who report to the COO (11%).
Dr. Jonathan Mitchell, Non-Executive Chairman of Global CIO Practice at Harvey Nash, says: "More than half of those holding CIO posts have a seat at the top table as genuine members of the executive team."
This is good news for Pamal Sharma who reckons: "It's no longer valid to have the head of IT not reporting in directly at board level. IT is more than strategic. It's the lifeblood of the business. IT is not just aligned with the business. IT is the business. If IT goes down, the business goes down."
Sharma believes the business needs to treat IT as critical, and that CIOs should behave accordingly: "IT needs to say, 'we are vital' and take on the responsibility that goes with that new reality."
Along with this changing nature of the CIO role, the idea of taking a CIO in a NED role has become more generalised. Phil Jordan says: "As all industries and businesses are having to develop and implement their own response to digital transformation, the breadth and size of companies deciding to invest in more specific industry expertise in the form of an NED is increasing all the time."
Regardless of the size of the company, Cathy Holley cautions anybody seeking an NED position to go in with their eyes open: "The company invites you on the board because they think you know what you're doing. If everybody else joins the board thinking that somebody else knows what they're doing, then you're in trouble."
Words of warning
Cathy Holley warns: "Taking on a NED role is not something people should do lightly. Nowadays, if you get it wrong, you could end up in prison. Do you remember Enron? They were doing illegal things. Some of their non-executive directors ended up in prison."
"In reality, it's not so likely that you will wind up in prison. What is more likely is that you will damage your reputation — and that's already severe."
Holley says: "Before you take on a non-executive director role, you have to do lots of due diligence. Most importantly, you need to check the financial rigour of the company. If you're not a finance person, you need to make sure there is somebody on the board who is.
"You need to meet every member of the board. You have to have good chemistry with the chairperson. If you don't, it's a no. You should walk away.
"You need to be confident that every single person on the board is doing their bit, bringing rigour in the areas in which they are an expert.
"There are courses you can go on - for example, those run by the Institute of Directors - that will tell you what your responsibilities are in terms of the governance of any board that you join.
"Once you do get an NED position, you have to do a lot of homework. Remember that the law assumes you know what's going on — and you can even serve time in prison. So this means that, outside your very full working day, you are probably going to do an enormous amount of reading. If it's not an organisation, or an area, that you are really passionate or fascinated about, it's going to get boring very quickly.
"A non-executive position is nothing like an executive position," Holley adds. "CIOs might be strategic thinkers, but they probably also own all of the delivery, and they're probably quite hands on, knowing exactly what goes on, and having complete influence and ownership of their world. When you become a non-executive director, you have to let go of all that. That's something CIOs find very difficult.
"As a member of the board, you are there to discuss every topic, IT being only one of them. So if you are not commercially astute, you have to ask yourself, 'Why am I doing this?'"