Companies Find CIOs Serve Key Role On Board Of DirectorsCompanies Find CIOs Serve Key Role On Board Of Directors

As IT proliferates throughout a company, common sense dictates that a CIO or other business technologist should sit on corporate boards. Though boards are a collection of experts in management, finance, law, and merger and acquisitions, business technology know-how is visibly absent on most boards.

"Boards are pretty insular groups, and technology issues are new ones for a lot of boards," says IT professor Eric Johnson, director of the Center for Digital Studies at Dartmouth University's Tuck School of Business. "Since major acquisitions have an impact on a firm, it makes sense to have people on the board who know the nuts and bolts about different kinds of acquisitions. Now that technology is an important corporate driver, it's only just begun to dawn on companies to have CIOs as part of the board selection process. Like any board, you try to assemble skills to use together to counterbalance what they hear from management, consultants, and other experts. A technology expert on the board can translate the technology [to business terms] and rank technology risks against other risks the firm faces."

Among a board's primary fiduciary responsibilities to shareholders is maintaining a company's financial health, which often means assuring a solid stock price. Word about major IT problems can drive down stock prices more than other bad news. Directors who fail to understand the role technology plays in the movement of a company's share price could prove troublesome. "Ten years ago, people didn't see IT as a risk," Johnson says. "But today, an IT snafu could create investor angst."

Another role of the CIO board member is to champion the corporate CIO's initiatives, says John Beran, executive VP and CIO at Comerica Corp., a major Midwest bank that has ex-Xerox Corp. CIO Patricia Wallington on its board of directors. Board members often look to other directors with specific expertise for validation of a corporate CIO's proposal. "When you have someone on the board who has a deep-rooted understanding of IT concerns, issues, and terminology, it can make your job a lot easier," Beran says.

Wallington, who meets several times a year with Beran, agrees that corporate CIOs appreciate the value of having a business technologist on their boards. "We can explain why things take so long, why they cost so much, and which things are important," Wallington says. "We add credibility."