NEW YORK--(BUSINESS WIRE)--Almost half (47%) of corporate directors surveyed are dissatisfied with their boards' ability to provide information technology (IT) risk oversight. A recent Oliver Wyman / National Association of Corporate Directors (NACD) survey of 204 corporate board members found that, while virtually all board members acknowledge that IT will have a significant business impact on the companies they govern over the next five years, more than half -- 51% -- say they are not given enough information to perform their oversight duties effectively.
Other findings highlighted in the report include:
- 36% of survey participants expect IT to improve operational efficiencies in the next five years.
- 30% believe IT will provide a competitive advantage for their companies in the next five years.
- 19% think IT will transform the companies they govern in that time frame.
- Only 16% report having been a CIO or senior IT executive earlier in their career.
"Significant risks are introduced by the ineffective use of information technology. We estimate that the world's largest 500 companies lose more than $14 billion every year from failed IT projects alone," says Jonathan Cohn, Oliver Wyman Partner and co-author of a report detailing the survey findings, Taming Information Technology Risk: A New Framework for Boards of Directors. "Companies that receive focused board direction on IT-related risk will have a competitive advantage over those that don't," he adds.
"Board members should think about IT risk in the context of a wide range of business concerns, rather than as a monolithic issue," says Mark Robson, Oliver Wyman Partner and report co-author.
Taming Information Technology Risk introduces a framework for board members to use in evaluating four areas of risk related to ineffective management of IT:
- Competitive risk is the threat that a rival will gain a competitive advantage through technology
- Portfolio risk is the danger that a corporation is allocating too much of its IT budget to basic operational expenses instead of transformational projects
- Execution risk is the failure to execute IT projects
- Service & security risk is the inability of IT systems to service employees and customers
For more information about this report, visit http://www.oliverwyman.com/taming_IT_risk
About Oliver Wyman
With offices in 50+ cities across 25 countries, Oliver Wyman is an international management consulting firm that combines deep industry knowledge with specialized expertise in strategy, operations, risk management, organizational transformation, and leadership development. The firm's 3,000 professionals help clients optimize their businesses, improve their operations and risk profile, and accelerate their organizational performance to seize the most attractive opportunities. Oliver Wyman is part of Marsh & McLennan Companies [NYSE: MMC]. For more information, visit www.oliverwyman.com.
The National Association of Corporate Directors (NACD) is the only membership organization delivering the information and insights that corporate board members need to confidently navigate complex business challenges and enhance shareowner value. With more than 10,000 members, NACD advances exemplary board leadership. NACD is focused on creating more effective and efficient boards through director-led education and peer forums to share ideas and leading practices based on more than 30 years of primary research. Fostering collaboration among directors and governance stakeholders, NACD is shaping the future of board leadership. To learn more about NACD, visit NACDonline.org.