The board of directors is responsible for overseeing the governance, management, and strategic direction of an organisation on behalf of its shareholders (or stakeholders). A critical part of this role involves identifying, managing, and mitigating risks that could impact the organisation. Given that technology plays a pivotal role in driving risk, strategic change, and productivity (which directly influences profitability), it’s surprising that many organisations—particularly large ones—do not have experienced IT professionals on their boards. As technology continues to grow in importance as a strategic business driver and enabler of innovation, the lack of focus on this issue is even more concerning. Despite the increasing relevance of technology, there is little discussion about this gap from shareholders, business schools, or the financial media.

I’m not referring to routine technology operations or the everyday risks of IT reliability and security. Instead, the focus here is on the broader strategic challenges organisations face, where technology plays a pivotal role in both unlocking opportunities and presenting significant risks. These are the high-level organisational risks, existential threats, and transformative opportunities that boards must remain constantly informed about and actively manage. Technology today is not just a support function but a key driver of strategy, innovation, and competitive advantage, and boards need the expertise to navigate these dynamics effectively.

Here are some of the critical strategic areas where technology plays a significant role that boards should regularly consider:

Technology risk and brand reputation – Data is arguably one of the most valuable assets an organisation possesses. While it may not appear on the balance sheet (though perhaps it should), safeguarding it is of critical importance. A data breach or loss can severely damage an organisation’s reputation, resulting in costly legal fees, loss of customers, diminished revenue, and substantial recovery expenses. In addition to the financial fallout, compliance issues come into play, where regulatory violations can lead to heavy fines or even disqualification from the industry in severe cases. As the stakes continue to rise, governments are increasingly holding boards accountable for data breaches and security incidents, recognising the far-reaching consequences of such failures. Therefore, ensuring data protection is no longer just a technical issue but a fundamental governance responsibility.

Interestingly, as I was writing this, an article from the Australian Financial Review landed in my inbox, discussing how the corporate regulator ASIC is now taking legal action against directors in response to cyber breaches and IT system outages. This highlights the growing accountability that boards face regarding technology-related risks.

A seasoned technology professional is likely to have firsthand experience in managing cyber security incidents, making them uniquely qualified to help an organisation not only prevent such incidents but also effectively respond when they occur. Their expertise is invaluable in ensuring that the organisation is well-prepared to mitigate risks and protect against regulatory and financial fallout.

New and Emerging Technologies – Technology is constantly evolving, and we’re now at a point where the possibilities seem limitless, with many yet to be fully explored. From the early days of mainframes to PCs, the internet, and mobile phones, each technological leap has transformed how organisations operate and how consumers engage with them. As technology continues to evolve, it not only offers opportunities for organisations to enhance operations and innovate but also introduces the risk of falling behind if not properly embraced.

To complicate matters, the landscape is filled with buzzwords and tech “hype,” making it difficult for organisations to determine where to invest, how much to allocate, and how to derive real value from their investments. This is where an experienced IT professional can provide essential guidance to the board, helping cut through the noise and shaping strategic initiatives that not only align with the organisation’s goals but may even redefine them. Their expertise ensures that the organisation is well-positioned to capitalise on technological advancements while mitigating the risks of mis-investment or stagnation.

Technology disruption – There are countless examples of technology disruption leading to the downfall of once-dominant organisations. In business school, I studied many of these cases, and the same pattern emerges every time: denial, denial, denial. Boards and executives often refuse to acknowledge the reality that everyone else sees, leading to disastrous consequences. We now view Netflix’s disruption of Blockbuster, Apple’s dismantling of Nokia, and digital cameras rendering Kodak obsolete as obvious outcomes, but at the time, these companies were likely focused on their traditional competitors.

Disruption often comes from unexpected directions. Would Blockbuster have been concerned about an internet company offering streaming at a time when internet speeds were painfully slow, and few people connected their TVs to the web? Nokia probably didn’t expect a computer company like Apple to take over their mobile phone market, and Kodak likely worried more about outperforming Fujifilm than about Sony’s early digital cameras with small storage and poor image quality.

Experienced technology professionals have witnessed these stories unfold before and understand the warning signs of disruption. Their knowledge and insight can guide an organisation in the right direction, helping them anticipate and adapt to emerging threats before it’s too late. Take Amazon, for example. Initially an online bookseller, Amazon was threatened by the rise of e-books. Rather than resist the change or ignore it, Amazon embraced the opportunity, creating the Kindle and building an entire e-reader ecosystem, allowing them to continue dominating the book market in digital form.

This foresight and willingness to embrace technological disruption are exactly what experienced IT professionals can bring to the boardroom, helping organisations not just survive, but thrive in the face of technological change.

Business models – Technology has the power to completely transform business models, not only by advancing technical capabilities but also by reshaping operations and reducing costs, leading to more competitive pricing structures. Take Apple Music, for example. It revolutionised the entire music industry, changing how consumers purchase and listen to music, how music is distributed, and how artists are compensated. The traditional model involved producers discovering talent, signing them to contracts, manufacturing CDs, and selling them in stores. Apple disrupted every part of that value chain. Many music stores closed, artists and producers now get paid per stream rather than per album sold, and artists can bypass producers entirely, releasing their music independently, cutting out manufacturers and physical distribution altogether.

Another compelling example is Thyssenkrupp, the elevator company, which harnesses advanced technology to stream real-time data from its installations. By applying machine learning, Thyssenkrupp can predict component failures or the end of a part’s life cycle, allowing it to fix issues before they cause outages. This capability enables the company to offer performance-based contracts or an “as-a-service” model, where customers pay for guaranteed service levels. Without changing its core product, Thyssenkrupp can now deliver superior service, maintaining a premium position in the elevator market by offering a value proposition that its competitors cannot match.

While technology professionals excel at recognising the potential for technological disruption, understanding how these disruptions affect business models requires additional business acumen. IT professionals who are well-educated in business concepts can help develop strategies to not only address emerging threats but also capitalise on new opportunities, driving innovation in the organisation’s business models. Their dual expertise in both technology and business enables them to foresee changes and adapt proactively, ensuring the organisation remains competitive in a rapidly evolving landscape.

Productivity (Stagnation) – If an organisation fails to invest in technology to keep pace with industry peers or neglects innovation, it risks stagnation. In such cases, productivity doesn’t just plateau—it often regresses, as aging technology systems become increasingly prone to issues and failures. However, over-investing or investing in the wrong areas can make matters worse, leading to rising technology costs without corresponding improvements in productivity—a lot of change with no gain.

An experienced technology professional who understands how to strategically allocate resources and extract maximum value from technology investments can make a significant difference. By ensuring that investments are well-targeted and aligned with business goals, they can not only prevent productivity from falling behind but can also enable the organisation to become more efficient and productive than its competitors. Their expertise helps navigate the complex balance between innovation, cost management, and operational excellence.

Customer Expectations – Most organisations recognize that the way customers interact with them changes over time, particularly as technology evolves, but few truly know how to embrace and adapt to these shifts. New technologies reshape customer expectations—whether driven by changes within your industry or by innovations in other sectors that influence how customers expect to engage with all businesses. I’ll never forget when internet banking first emerged. I was banking with a company that hadn’t adopted it and had no clear plans to do so. I switched to a bank that offered internet banking because I saw it as a game changer I couldn’t be without. The bank I left lost me, and likely many others. Within six months, they launched their own internet banking platform, but by then it was too late. They didn’t need to be the first to market, but they had to at least acknowledge and embrace the change, which they failed to do.

Another prominent example of resistance to evolving customer expectations is Oracle’s CEO, Larry Ellison, who once called cloud computing a “dumb idea.” Yet, cloud computing has since become one of the most transformative technological advancements of our time, with Microsoft, Amazon, and Google leading the way as three of the largest companies in the world. Oracle eventually embraced cloud computing, but by then, it struggled to gain a significant foothold in the industry. While Oracle remains a major player in the tech world and is still highly profitable, it’s worth considering how different its cloud presence could have been if it had adopted the technology earlier.

These examples highlight just a few of the risks, threats, and opportunities organisations face that boards must carefully consider. They also demonstrate the immense value a technology professional can bring to a board, helping an organisation embrace technology not merely as a cost but as a powerful enabler of business growth and competitive advantage. By positioning technology as a strategic asset, rather than just a budget line item, organisations can stay ahead of shifting customer demands and industry disruptions.

If you want to embrace technology as an integral part of your organisation, consider the following recommendations:

• Appoint an experienced technology professional to the board to enhance technology strategy and oversight. If a direct appointment is not feasible in the short term, engage a technology advisory firm to provide expert guidance until you can appoint someone to the board.

• Appoint a CTO or CIO with a direct reporting line to the CEO. As a critical business function, comparable to finance or HR, the technology leader should report directly to the CEO to ensure clear communication and alignment on technology strategy, without being buried under multiple layers of management.

• Establish a technology steering committee with senior representatives from each business unit. Chaired by the CIO, the committee should have a high-level sponsor—ideally the CEO or CFO—to ensure decisions carry the weight necessary for driving initiatives forward. A monthly report outlining key decisions, progress, and outcomes should be prepared for board review and consideration.

• If your technology systems have been neglected or lack senior-level oversight, conduct an external review with a reputable technology advisory firm. This review will assess your current technology landscape, identify key risks, and provide actionable recommendations for improvement.

• Consider technology risks within your organisation with the same importance as other critical business risks. Foster a culture of enthusiasm toward technology, as leadership sets the tone for the entire organisation. Complacency at the top will filter down, leading to reduced vigilance and resistance to necessary technological change.