Corporate board members should embrace digital technology, harness risks and diversify their boards if they want to seize new opportunities and help the companies they serve succeed in the digital world.
That message was delivered by corporate executives and other experts at the 12th annual Corporate Governance Conference held at UT Dallas’ Naveen Jindal School of Management. The conference was hosted by the Jindal School’sInstitute for Excellence in Corporate Governance.
Monte Ford, a director at Akamai Technologies Inc. and former chief information officer of American Airlines, was the keynote speaker. He said that boards of directors must become more diverse — in backgrounds, experiences, ethnicity and gender — and adapt to technology.
“I truly believe that there are great opportunities ahead for all corporate directors to help the companies they serve deliver tremendous value,” Ford said. “But to take advantage of them, we need to understand the landscape in which we’re operating.”
Ford’s keynote address was part of the Max Hopper Speaker Series. Hopper (1934-2010), a longtime chief information officer of AMR (the parent company of American Airlines) and former chairman of the Jindal School’s Advisory Council, was known for developing the computerized airline reservation system SABRE.
The event also featured Barry Libert, chairman and CEO of OpenMatters, and Bill Ribaudo, managing partner and leader of Deloitte & Touch LLP’s Technology, Media and Telecommunications. The two presented recent research that indicates financial statements no longer capture much of the value organizations create.
Conducted by OpenMatters with Deloitte & Touche analysis, the research examined 40 years of data from the Standard & Poor’s 500 index and revealed that digital technologies are disrupting existing business models and their underlying sources of value. The research finds that investors assign higher valuations to organizations that embrace emerging technologies, such as big data, social media, the Internet of Things and mobility.
“Many current business models are under pressure by new technologies that are allowing other people to create new business models and putting pressure on yours,” Ribaudo said.
Companies should not try to reinvent their core business model overnight, Ribaudo said, but instead should form a strategy for incrementally transitioning from an asset-focused business to a service-centric organization or a technology or network firm.
Another highlighted speaker at the conference said that women and minorities remain underrepresented in U.S. corporate boardrooms, hampering companies’ potential to lead in the global economy.
“[Catalyst] was the first to come out with a report that showed that companies with women in the executive suite financially outperform companies without them, and we’ve seen many other studies since,” said Ilene Lang, former president and CEO of Catalyst — a research company that advocates for women and minority directors. “I thought when we released this study in 2004, we would see rapid change because people would say, ‘Oh, my gosh. This is so incredibly good for business.’ But in fact, we’ve seen almost no change since then.”
Lang said that men still occupy 80 percent of all corporate board seats, and that in 2013, 70.5 percent of Fortune 500 companies had no women of color.
“When I hear people say, ‘Why women?’ I answer the question with a question: Why not women?”
