Despite a rapid technological acceleration caused by the pandemic, many leaders remain under-skilled and struggling to keep up with a fast-changing digital landscape, a new report released by Governance Institute of Australia has found.
The Driving the digital revolution: A guide for boards report found more than half the respondents have few, if any, directors with technology skills as part of their core skill set, highlighting the need for significant board renewal and upskilling in order to fill the digital skills gap.
The report also found 21% of organisations do not have a digital transformation underway, and more than half of the respondents have few, if any, directors with technology skills as part of their core skill set. Of those with no digital transformation underway, 40% said it was not a priority, and 25% said it’s because they don’t have the required skills.
The report’s findings are based on a survey of 481 CEOs/ C-suite executives, non-executive directors, senior governance and risk professionals, and a working group of digital experts, including NSW’s Chief Data Scientist, Ian Oppermann.
The highest proportion of respondents (36%) in the report are from the not-for-profit (NFP) sector. Also represented are small to medium-sized enterprise (16%), government (14%), large unlisted business of more than 200 employees (14%) and ASX listed businesses (12%).
Governance Institute Chair, Pauline Vamos said the report’s findings show directors and senior managers need to “prioritise digital as a matter of urgency.”
“While many organisations are on track with their digital transformation, many are not, and this is concerning because inaction can lead to some businesses becoming severely compromised or obsolete.”
Additionally Vamos said the NFP sector faces its own set of digital challenges.
“Some concerning trends were uncovered for the NFP sector in this report, including that the sector gave a lower rating for their organisation’s management and protection of data than other sectors did, with 46% saying the management of data was ‘average’ and six per cent said it was ‘poor’.
This is less favourable to the responses for the ‘unlisted large business’ sector where only 30% gave an ‘average’ rating and three per cent gave a ‘poor’ rating.
Cyber security and cyber attacks are considered the top technology risks for survey respondents, both now and in 2030, closely followed by data management.
And while these concerns are regularly confirmed by a growing number of large-scale cyberattacks, boards must also be mindful of the potential damage an insidiously silent piece of malware, such as keyloggers—a form of spyware—can have on their businesses and customers.
Ms Vamos said that Australia is now at a point in the digital revolution where aggressors are often vastly more digitally savvy than the boards charged with governing organisations.
Tips to help NFP boards drive the digital revolution
- Embrace digital: it’s good governance to undergo a digital transformation
- Define your strategy: know what digital transformation means for your organisation
- Innovate: make sure innovation is at the heart of your digital strategy
- Upskill: make sure you have the right mix of technology skills around the boardroom table
- Focus: establish a board-level technology committee to oversee your digital transformation
- Discuss: make digital transformation a standing agenda item for each board meeting
- Don’t fear cyber: keep cyber risk and mitigation processes under constant review to build the board’s confidence
- Get on top of data: establish data management systems to mitigate risk and facilitate your digital transformation.
The full report can be downloaded here.
Governance Institute’s 2022 National Conference on 12-13 September in Melbourne and virtually will discuss the latest issues for the NFP sector. See the full agenda here.
To learn more about the Governance Institute’s short courses and certificates tailored specifically for the NFP sector go to the Governance Institute of Australia website.