The Importance Of a CIO...

Whereas it is generally a given that a company's CFO will sit on the main or executive board, the position of a CIO is much less clear.  Chris Wyper, from international management consultancy Kurt Salmon, investigates the case for having the CIO on the board.

To many, putting the CIO on the board is an obvious decision. They would argue that she or he is of sufficient seniority and importance to report to the CEO directly.

In fact, a CIO’s correct position depends on the relative importance of IT within the organisation. If IT is regarded by the board as simply operational in nature then the CIO should not report into the CEO. If, however, IT is seen as strategic and core to the success of the business, then the CIO should have a seat at the top table.

Where there is a difference of opinion between the CEO and the CIO over which bracket a company's IT falls into, this can have repercussions, but for the purposes of this article, we will assume that a CIO runs a strategically important group that is core to the business’s success and that the CEO shares this opinion.

In this instance, it is important that a CIO sits on the board for a number of reasons.

Most importantly, it makes it easier for the IT department to make other directors aware of the ways in which IT can drive and support competitive advantage.  Far too many boards still have only a vague grasp of the business value to be realised through properly leveraging IT services. Having a CIO on the board can increase that level of understanding.

Being on the board also enables the CIO to be seen as an equal to the other executives. This is particularly important when driving change through their organisation. Obtaining peer-level buy-in means that impediments to change can be diminished, especially if the agreement is made collectively. Change is typically both an IT and a business responsibility.

Because  many aspects of IT, particularly the more technical, can be hard to understand, having a CIO on the board is a good way of explaining the risks of any actions to key decision makers. A CEO is more likely to accept risk than a CFO, so reporting to the executive board and CEO at least allows for a discussion of the relative risks and benefits.

From a CEO's perspective, having a CIO on the board also means that they can keep close tabs on significant business-affecting events where IT is essential to prevent or counter a threat, such as resolving  operational issues to prevent market share loss.

It is particularly important for a CIO to report to the CEO where the business is one that thrives on innovation. Where IT has the freedom to explore what is best for the business in terms of IT investment, the company can benefit hugely, but the board needs to be comfortable with the potential pitfalls as well.

Taken collectively, these reasons create a convincing case why a good CIO can be a tremendous asset to the board of any company where IT is strategically important.

Notes to editors:
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