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7/27/2005
10:20 AM
Rob Preston
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Opinion: Why The CIO Should Be On The Board Of Directors

No single executive has more visibility across more business processes than the CIO. It's time for companies to recognize the importance of this position, says Network Computing editor Rob Preston.

In the latest survey on the tortured subject of aligning IT with business strategy, 46 percent of 2,000 senior executives told recruiting firm Korn/Ferry International that CIOs "absolutely" have a role to play on a company's board of directors. What's startling about this finding isn't the fact that almost half the execs think CIOs have the experience, expertise, comportment and intelligence to shape a company's future. It's that more than half are less than sure.

The Korn/Ferry survey follows a study last year by Burson-Marsteller which found that only 5 percent of more than 3,000 companies it researched actually had a CIO on their boards. A quick look today at the boards of the 10 largest companies in the world reveals no IT execs on their boards, though No. 1 Wal-Mart has a prominent technology venture capitalist, while No. 5 General Motors, No. 6 Daimler-Chrysler and No. 8 Ford have current or former tech vendor CEOs on their boards.

Going Up?

The excuses are legion for why IT executives aren't being elevated to boards and other positions of power. They concentrate too much on speeds and feeds and not enough on strategy. They don't communicate well in the language of business. They're not famous enough. In other words, they're introverted geeks.

For all the Harvard Business Review chitchat about IT-business integration, many companies still don't buy it. In perusing the resumes of Fortune 500 board directors, you find eclectic backgrounds--mostly finance, sales, legal and general business administration, but also engineering, consulting, manufacturing and other fields. Is it even the slightest stretch to suggest that technology experts could also inhale that rarefied air? To suggest otherwise is more than a little insulting to an entire profession that has essentially driven the economy over the past decade.

Last year's Burson-Marsteller study concluded that companies with CIOs and other senior IT execs on their boards outperform their competitors, with profits averaging 6.4 percent above industry averages. It's not just a hollow statistic. A tech presence at the very top makes a big difference for one overarching reason: No single executive has more visibility across more processes than the CIO, especially as regulatory compliance, information security and disaster recovery become ever more urgent and pervasive.

As such, the best CIOs have an intimate understanding of finance, sales, production, operations, customer service/retention, procurement, supply-chain management and human resources because they must collaborate with their peers in those departments week to week. Even the CEO doesn't have the deep cross-discipline insight an effective CIO must have to succeed.

One With a Vision

The largest and arguably the most successful company in the world, Wal-Mart, sees IT know-how as so intertwined with its business success that it sued several companies in 1997 for allegedly conspiring to steal the retailer's trade secrets by poaching its IT employees. Wal-Mart eventually settled that suit, but it has continued over the years to show how much it values technologists as leaders, appointing former CIO Kevin Turner to head its now $37 billion Sam's Club operations and seeding its board with tech visionaries. Among the other companies that today have a current or former CIO on their boards are Hershey Foods, Canon, Mellon Financial and Drugstore.com.

It's time for the rest of the corporate world to recognize tech leadership for the strategic discipline it is. If it were just about keeping the network up and keeping users from griping, all of IT would have been outsourced long ago. Tech executives have grown up; so should everyone else.

Rob Preston is editor in chief of Network Computing. Write to him at rpreston@nwc.com.

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