PricewaterhouseCoopers has recently published its Annual Corporate Directors Survey for 2013 and the section on IT Oversight has mixed messages for CIOs. The report is based on a survey of 934 public company directors of which 70% serve on boards of companies with more than $1 billion in annual revenue.
The good news for CIOs comes from the report’s headlines that boards are spending more time on IT issues and are consulting their CIOs more often whilst an impressive 88% of respondents said that IT was important to creating shareholder value in their company. However, as ever with these surveys, the real issues lie in the detail of the report.
Let’s look at the first headline about boards spending more time on IT issues. 56% of directors say their boards spend at least 6% of their time discussing IT risks and opportunities (compared to 51% in 2012) with 31% saying they spend between 6 and 10% of their time on IT. So, whilst board time spent on IT is growing, given the proportion of companies that view IT as being important to creating shareholder value, it still seems a bit on the low side as 44% still spend less than 6% of their time on IT and 75% spend less than 10% of their time on IT issues. Should CIOs be worried by this?
Given the second headline, that boards are consulting their CIOs more often, the answer should probably be no. But the data shows that only 20% of board members communicate with their CIO at every formal meeting (18% in 2012) while 31% (30%) communicate with the CIO at least twice a year. So the growth is small and the overall level of engagement is still relatively low given that IT is considered to be strategic and important to shareholder value by 88% of companies.
The survey also shows an increase in the number of boards seeking help from external consultants on IT matters with 35% (27%) saying they had engaged a consultant on either a project-specific or continuous basis. And whilst still only a relatively small proportion, perhaps most worryingly for CIOs is that the number of companies engaging external consultants for IT advice on a continuous basis had doubled from 4% in 2012 to 8% in 2013.
So are we seeing the start of a trend in which boards are turning to external consultants instead of their own CIOs? And is this just to validate the CIO’s views or are consultants being used to fill gaps in the CIO’s experience, skills, credibility or capability? Either way it’s a potential worry for CIOs and could be further evidence that CIOs and IT functions are not evolving quickly enough to meet the needs of the business in the digital age.