The Benefits of Board-Level Oversight
Companies are not creating IT oversight committees because they have lost confidence in their CIOs. On the contrary, board-level technology committees ensure that IT is given the attention that's due to such an important (not to mention costly) function. "When you make IT an official committee of the board of directors, you put IT on an even playing field with other important aspects of the business, like finance and HR, that are served by board-level committees," says FedEx's Carter. "Any CIO should be striving for that kind of visibility with the board."
John Crowther, vice president and CIO of Diebold - a maker of ATMs, security systems and electronic voting stations - agrees that board-level attention to IT gives the function credibility with the business. He regularly attends board meetings as a member of the senior management team. "The recognition of IT at a board level naturally cascades across an organization," Crowther says. "When the business-at-large sees the board and executive team giving time and attention to information technology, they know it's something they have to take seriously."
In addition to the visibility, board-level attention to IT ensures lockstep alignment between IT and business strategies. Farrow, of the Chicago Board of Trade, claims that his project completion rate is substantially higher than industry averages and attributes successful deployments to his presence at monthly board meetings where he participates in discussions of business needs, priorities and technology solutions. For example, when it came time for the Chicago Board to convert its electronic trading platform earlier this year, Farrow received a lot of guidance from his board regarding the features and functionality he should be looking for in a new system - as well as key milestones for testing, deployment and training traders on the new system. Because of the board's input, Farrow says he was able to deliver - on time and under budget - a dynamic trading platform that has boosted the exchange's trading volumes.
In effect, Farrow's board helped him share responsibility for such a complex and risky project.
Similarly, at FedEx, where Carter is currently deploying a new series of handhelds to 40,000 FedEx ground contractors and its courier workforce, the CIO says his board helped him navigate such important decisions as selecting the right platform, operating system and wireless network. Its members also helped him think through the security issues.
"I think Rob sees us as an asset, another set of eyes and ears and brains focused on making FedEx successful," says Estrin, chairwoman of the oversight committee. "If we ask a question that makes him realize that maybe he hasn't thought through something, he sees that as a benefit."
Of course, not all boards have the technology expertise that Carter's IT oversight committee has. While some CIOs will privately admit that there are negative aspects to board-level oversight, they won't say so for the record. "No one is interested in smoking their CEO's board," explains Stephen Mader, president and CEO of executive recruiter Christian & Timbers.
Indeed, Carter says he realizes that the board's involvement in his area means that he and his IT staff have to be on their toes. "With this level of board visibility, we have to be sharp. We have to be accountable. We have to make this stuff work," he says. "[The IT staff] understands that their key projects will be reported to the board of directors, which certainly creates a higher level of accountability, and that's a good thing for the organization."
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