Business & Finance
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10/29/2004
05:40 PM
Stephanie Stahl
Stephanie Stahl
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Editor's Note: Advantages Of A Tech-Savvy Board

How closely do you evaluate the boards of directors for companies you invest in, whether you're a consumer of their products or a shareholder? If you're buying millions of dollars of products, services, or stock, chances are you have a pretty good idea of the company's financial health and its management and leadership. And with all of the attention on governance and accountability following high-profile business scandals, you probably are interested in the board of directors who provide oversight.

Consider the significant dollars being spent on compliance or revving the supply chain or better customer service. Or the millions that may be saved through an outsourcing deal or from business-process reengineering. Since IT is an integrated component of most companies and a significant driver of business innovation, why do so few companies have tech-savvy board members? According to a study conducted earlier this year by Burson-Marsteller, less than 5% of Global 500 companies have directors with top-level IT-management experience. But companies with technology-smart directors on their boards deliver annual returns 6.4% above the average performance of Global 500 companies.

Retailer Saks gets it. It has one of the industry's most powerful CIOs on its board, Rob Carter of FedEx. FedEx gets it. It has two tech-savvy directors on its board. Home Depot gets it. It has several tech-smart directors that helped its CIO, Bob DeRodes, with a critical outsourcing decision. United Stationers gets it. It has a newly formed IT committee on its board. These are just a few of the examples discussed in this week's cover story. The advantages business-technology professionals can bring to boards of directors are plentiful. So why are they so scarce?

Stephanie Stahl
Editor-in-chief
sstahl@cmp.com


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