A Duty to Digital: The Board of Directors’ Role in Driving Change

Earlier this year, the editors of 24/7 Wall St. made a list of CEOs who needed to be fired. “CEOs who have repeatedly failed to successfully execute their own primary strategies made this list.” Of the CEO of American Express, they wrote, “With the rise of Visa, MasterCard, PayPal, Apple Pay and a myriad of other forms of competition in card processing and card issuance, the time for a new transformational CEO for the digital age has arrived.” [1]

Ideally, it is the company’s board of directors who should make that call, according to a panel of experts at the Center for Digital Transformation’s annual conference at The Paul Merage School of Business at UC Irvine on March 24. What can board members do to drive such a digital transformation from the top?

1. Bring in the outside perspective: When an industry undergoes tremendous upheaval—as health insurance did with the Affordable Care Act—board members can bring valuable points of view to the challenge. For example, Anthem had not focused extensively on consumer analytics because it thought its customer was Ford Motor Company, not Ford’s employees. According to Anthem board member Julie Hill, the board saw that “consumerism was coming, transparency was coming.” They needed to find Anthem a leader who understood B2C.

2. Look for lessons in failure: In the digital arena, CEOs need to communicate what they could learn from an initiative if it failed, and boards need to get comfortable with failing fast, learning quickly, and turning insights into actions. Even ongoing operational issues, such as information security, have presented new challenges for companies amid growing cyber crime. Both Anthem and Target learned from their respective online security breaches. Today the boards are better educated and fully engaged in monitoring, discovery, remediation, and communication with constituents.

3. Get incentives right: “Digital is everyone’s responsibility,” said Brian Niccol, CEO, Taco Bell. “The customer doesn’t care about anybody’s job title.” They want a frictionless experience with the brand. For example, rather than pit its retail stores against its online and mobile site, Target’s incentives now align both teams around customers, said Austin.

Hill added that CEOs need someone who can see beyond the next earnings guidance. Pressure for positive quarterly earnings can torpedo many a good idea. “Board members can give air cover” to CEOs who need to move quickly, she said.

“Catch up is expensive,” said Austin. Worse, it takes a toll on corporate reputation and employee morale. Board members need to take the long view. Without board input and oversight, digital transformations will stall out quickly.

[1] McIntyre, Douglas A, and Jon C. Ogg. “CEOs Who Have to Go in 2016.” 24/7 Wall St., LLC, 25 Feb. 2016. Web. 18 Apr. 2016. <

About the Session

Senior executives and Boards of Directors need a new set of leadership skills to successfully spearhead digital initiatives. How much digital savvy do they need? How do they manage risk? CDT Founding Director Vijay Gurbaxani sits down with Board members Roxanne Austin (Target), Julie Hill (Anthem) and CEO Brian Niccol (Taco Bell) to obtain perspectives from 3 leading companies.

Transformation Begins at the Top was presented as a part of the Center for Digital Transformation’s annual one-day Road to Reinvention: Leadership in the Digital Age conference on March 24, 2016 at the University of California, Irvine. + MORE


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