A 74% increase in the number of CIOs on Fortune 100 boards between 2015 and 2017 demonstrates the increasing recognition of the strategic value of CIOs to companies. However, this number still represents only 31% of the total which have CIO representation at board director level.
Similarly, research by CIO UK found that only 29% of CIOs are full members on their organisation's board, although some 83% are part of their organisation's executive leadership and 51% meet with their CEO at least weekly.
This is in spite of the fact that technology and digital strategy are now vital to the success of almost every business. "All companies are technology companies today," Sheila Jordan, CIO at Symantec and director at FactSet, told the Harvard Business Review. "Technology is a lever to run the business, but also to change and grow."
This means it is essential for boardrooms now to include some form of technological expertise. Nearly half of the Fortune 500 companies in 2000 no longer exist, and one crucial reason is a lack of innovation.
Between 2011 and 2017, the proportion of companies that have technology-focused board members increased from 10% to 17%. However, it's important to note that the proportion is almost double - at 32% - for high-performing companies, suggesting a link between understanding the importance for technology in the boardroom and business success.
What CIOs can bring to the boardroom
CIOs can bring a wealth of knowledge to the boardroom. This includes insight into how to leverage technology to streamline operations and create a competitive advantage for the company, spotting opportunities in new technology and increasing the safety and security of procedures surrounding information handling.
The CIO can act as an important intermediary between board members and more specialised technology roles within the company. In doing so, they can help board members understand the importance of technology for achieving business goals.
Data analytics is another element that's now vital for boardrooms to understand and use to inform decisions, and another area where CIOs can provide understanding and clarity.
Giving input and feedback on technology budgets is also a vital role of a CIO board member. A 2017 Deloitte global CIO survey found that 37% of respondents said their technology budgets increased by up to 20% since the previous financial year. Managing expenditure is an important topic in the boardroom, but without a technology expert in the room, there could be a lack of understanding surrounding IT spending.
In fact, 34% of corporate directors say that the board is not sufficiently engaged in understanding the annual IT budget.
"Boards need to gain an appreciation for what the possibilities are, including how technology can help established successful companies with needed transformation," Tim Theriault, former CIO of Walgreens Boots Alliance and current board member of Alliance Data, told the Harvard Business Review. "To do that, they should surround themselves with people who can be helpful. Some CEOs are still in denial, and time is against them — the longer it takes, the more dramatic the needed transformation and the higher the risk."
How can CIOs land a spot in the boardroom?
CIOs face some hurdles when attempting to transition into the boardroom. One is the perceptions of other C-Suite members. According to a 2017 survey conducted by Forrester: "Only 36% of business users think IT is aligned with the needs of the business, delivers projects on time, reduces frequency of issues and offers updates to improve productivity."
CIOs are also fighting against stereotyping that portrays them as 'IT geeks'. Fighting against this stereotype is one way that ambitious CIOs can make a case for their inclusion in the boardroom.
"Boards can initially be hesitant about less-traditional directors," Theriault told HBR. "They want to make sure any new directors will be a good fit with the rest of the board and that they will be able to participate and contribute value to board discussions beyond their functional area.
"There is a fallacy that CIOs are tech geeks; successful CIOs understand people, technology, and business strategy."
It's important for the CIO to emphasise their qualities as a professional that's skilled at integrating technology operations across a range of departments.
A successful CIO should have the ability to bridge the boardroom and more specialised technical operations. To do this, they must have excellent communication skills and be able to summarise initiatives so as not to overwhelm non-technical board members. Outlining the overall picture on how technology can inform and achieve larger business goals is preferable - in other words, it's important to understand your audience.
The numbers are encouraging on this front - 56% of CIOs today now have leadership experience outside an IT role, meaning they're likely to possess the business acumen and people skills necessary to enter the boardroom.
"If a board is looking for a qualified technology person, they're going to find a large percentage that are strong on technology but also good business people," says Wayne Shurts, EVP and CTO of Sysco. "Most CIOs didn't get to the C-suite just by being a geek."
It's also important for CIOs to communicate in terms of business rather than technology. Discussing complicated, specialist IT can quickly alienate a more generalised audience. Instead, they must connect IT objectives to the general objectives of the business and board members - speak about business goals and how to achieve them with tech initiatives. CIOs who fail to do so are commonly pushed back beneath the CFO in the management structure.
"For a CIO to gain credibility with the CEO and board, they need to talk in terms of business outcomes," said CIO 100 member Dave Roberts, who is board director at Radius Payment Solutions. "Technology is an enabler to drive greater efficiency, product diversification and increasing speed to market. The CIO is not just a trusted business partner and technology advisor but also a driver of innovation and thought leadership across the C-Suite."
Forming strong interpersonal relationships with a number of key people is crucial for any CIO with their eye on a chair in the boardroom. Firstly, it's vitally important to form a strong relationship with the CEO. This is the person to pitch new IT-led business strategies to. It's important to show them how integral good IT management and technological transformation is to the success of a business.
Evidence shows that this is a natural evolution taking place within the role of the CIO. Our 2016 CIO UK survey found that 61% said that driving business innovation was their top priority, with many saying their role was now more focused on business than IT.
But beyond the CEO, it's also important for the CIO to build strong relationships with a number of internal stakeholders. And data shows that most CIOs are aware of this. An EY study found that 72% of those surveyed said that this was highly important. Which stakeholders are the most important? The same survey found that 76% of CIOs have strong relationships with the CFO and 69% with the CEO.
However, CIOs looking to go the extra mile could also think about developing relationships with external stakeholders as well, in order to more fully appreciate the needs of the company's clients. This is an area where CIOs currently have less input.
EY found that only half of the CIOs surveyed said their relationships with customers was a strength, and only 35% thought these were important relationships to develop. However, this could be an area that becomes more important to CIOs in time.
But although CIOs can influence the decision on whether to include them in the boardroom or not, sooner or later CEOs may realise they're impeding their business goals by keeping them out.
"I believe strongly that proper business CIOs who see opportunities and bring thought-leadership, strategy and vision matched with delivery should sit - along with HR - on more boards," Simon Iddon, CIO at The Restaurant Group, told CIO UK. "Businesses that do not fully embrace the power of technology and people will fall to the wayside of those who do."