Digital transformation efforts are going well beyond the domain of IT to involve the entire organization, elevating digital strategy to the top of the board of director agenda, according to a recent report by professional services firm BDO USA.
The firm surveyed 145 corporate directors of public company boards in July and August 2018, and found that new regulations and emerging risks are driving boards to reevaluate corporate strategy and investments. Most directors indicated that their boards are working to better understand data privacy regulation.
While organizations might be making ad-hoc investments in digital solutions, many have not yet set a digital transformation strategy into motion. About one third of the respondents (34 percent) said their organization has no digital transformation strategy currently and does not intend to develop one in the near future. Two-thirds (66 percent) of public company board directors said their organization either has a digital transformation strategy in place or is planning to develop one.
With or without a concrete strategy in place, boards are taking steps to address technology disruption, the report said. Nearly half (45 percent) have increased capital allocation toward digital initiatives and 29 percent have hired board members with relevant oversight skills. Another 16 percent of board directors have introduced new metrics for enhanced business insight.
“Developing a strategic path for an organization’s digital transformation and devoting company resources and board oversight to cyber security and data privacy are now necessities for businesses to survive and thrive during this time of intense change,” said Amy Rojik, national assurance partner and director of BDO’s Center for Corporate Governance and Financial Reporting.