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Fortune 500 Boards Lack CIO, CFO Representation

Study finds most Fortune 500 companies are lacking when it comes to adding tech know-how to their boardrooms.
Most Fortune 500 companies are lacking when it comes to having tech know-how in their boardrooms, according to a new report.

Global public relations firm Burson-Marsteller released a report Wednesday on the lack of tech-savvy board members among the FortuneGlobal 500 companies. The report, "A Missing Competency: Boardroom IT Deficit: Helping Your Board Get IT" reveals that only eight percent have a current or former Chief Information Officer or Chief Technology Officer on their boards.

The report states that businesses with information or technology officers on their boards demonstrate an advantage, with annual returns 9.2 percent above relevant indices. Though the gains can be attributed to many factors, there appears to be a relationship between IT knowledge in boardrooms and higher returns, according to the report.

The global report did show an increase from five percent in 2003 to eight percent in 2005. Most of the companies with IT leaders are headquartered in North America or Asia-Pacific.

A separate analysis of the top 25 companies among India's Economic Times 500 showed that those companies were 10 times more likely than the top 25 globally to have information or technology officers on their boards (42 percent and four percent).

The results highlight growing competition between the two reasons for technological innovation, according to a statement released by Burson-Marsteller.

"Companies in India raise technology-adoption standards for businesses in the Asia-Pacific region and beyond," Bill Rylance, CEO of Burson-Marsteller, said in a prepared statement. "Their leaders' extensive IT knowledge brings success in managing large-scale workforces and delivering high-quality products and services."

In China, only six percent of the top 25 companies have information or technology officers on their boards.

Technology experts can help corporate boards drive innovation, optimize business processes and deliver products and services efficiently, keeping companies competitive, said Leslie Gaines-Ross, who authored the report and is Burson Marsteller's chief knowledge and researcher worldwide.

"To unleash innovation and economic growth, companies need to look beyond financial, managerial and legal experience and give equal weight to technology experience on their boards," Jennifer Graham, chair of Burson-Marsteller's Global Technology Practice said in a prepared statement. "The capacity of technology to build strong revenues and shareholder returns, as well as greater return on corporate investments, increasingly makes its positioning the boardroom a business imperative."