Report Provides Boards with Practical Advice for Guiding Enterprises Amid Digital Disruption
WASHINGTON, Aug. 08, 2019 (GLOBE NEWSWIRE) — The National Association of Corporate Directors (NACD), the authority on boardroom practices representing more than 20,000 board members, and Marsh & McLennan Companies (NYSE: MMC), the world’s leading professional services firm in the areas of risk, strategy, and people, today released Governing Digital Transformation and Emerging Technologies: A Practical Guide. This report, based on primary research conducted through interviews with company directors as well as a survey of 200 NACD members, outlines a practical approach to advancing board oversight of digital transformation and emerging technologies.
“Businesses of all sizes across every industry are being confronted with unprecedented technological change, forcing them to reimagine traditional practices,” said Peter R. Gleason, president and CEO of NACD. “This report provides fresh thinking to improve board oversight in the digital era, so that boards can guide their companies toward success.”
Corporate directors recognize that governing digital transformation is a challenge. According to the NACD 2019 Digital Governance Pulse Survey,
- 66 percent of directors believe their companies will be vulnerable to the disruptive impact of emerging technologies in the next year;
- one in three directors believe that no one, specific technology, but rather a combination of technologies, will significantly transform their business; and
- while 81 percent of boards prioritize cybersecurity discussions with management, only about half focus on topics of more long-term strategic relevance, such as digital transformation initiatives.
“We know from our research and engagement with companies that the most successful corporate directors understand the tone for innovation is set from the top,” said Leslie Chacko, managing director, Digital Insights and Solutions, Marsh & McLennan Companies. “This framework will help directors confidently address the risks and opportunities presented by technology to unlock value across their companies.”
The report outlines five foundational principles to help prepare directors for navigating the complexities of digital transformation and emerging technologies, such as artificial intelligence, blockchain, the Internet of Things, and robotics process automation. Here are the five principles:
- Approach emerging technologies as a strategic imperative, not just as an operational issue.
- Develop collective, continuous, technology-specific learning and development goals.
- Align board structure and composition to reflect the growing significance of technology as a driver of both growth and risk.
- Demand frequent and forward-looking reporting on technology-related initiatives.
- Periodically assess the organization’s leadership, talent, and culture readiness for technological change.
In the report, each principle includes specific recommendations to assist boards with charting potential pitfalls, spotting red flags, and formulating and adopting a more cohesive oversight approach to help them chart a path to effective digital transformation oversight.
To help boards navigate the interconnected and simultaneous forces presented by the digital era, NACD also offers experiential education opportunities such as curated director tours of the Consumer Electronics Show (CES®) and access to the latest business incubators leveraging technology in Silicon Valley. NACD has also led an effort to close the board’s knowledge gap on cyber risk through educating its members on leading practices, convening key stakeholders, and engaging the director community in an ongoing dialogue.
The National Association of Corporate Directors (NACD) empowers more than 20,000 directors to lead with confidence in the boardroom. As the recognized authority on leading boardroom practices, NACD helps boards strengthen investor trust and public confidence by ensuring that today’s directors are well prepared for tomorrow’s challenges. World-class boards join NACD to elevate performance, gain foresight, and instill confidence. Fostering collaboration among directors, investors, and corporate governance stakeholders, NACD has been setting the standard for responsible board leadership for 40 years. To learn more about NACD, visit www.NACDonline.org.
About Marsh & McLennan Companies
Marsh & McLennan (NYSE: MMC) is the world’s leading professional services firm in the areas of risk, strategy and people. The Company’s 76,000 colleagues advise clients in over 130 countries. With annualized revenue approaching $17 billion, Marsh & McLennan helps clients navigate an increasingly dynamic and complex environment through four market-leading businesses. Marsh advises individual and commercial clients of all sizes on insurance broking and innovative risk management solutions. Guy Carpenter develops advanced risk, reinsurance and capital strategies that help clients grow profitably and pursue emerging opportunities. Mercer delivers advice and technology-driven solutions that help organizations meet the health, wealth and career needs of a changing workforce. Oliver Wyman serves as a critical strategic, economic and brand advisor to private sector and governmental clients. For more information, visit mmc.com, follow us on LinkedIn and Twitter @mmc_global or subscribe to BRINK.
Marsh & McLennan Companies