Errrm, what's a tweet, again? Top execs lack digital skills

Is a lack of non-executive directors with digital experience holding back businesses?
Written by Steve Ranger, Global News Director

UK businesses lack senior executives with digital skills, leaving them trailing far behind their US rivals.

A mere one percent of non-executive directors (NEDs) at Europe's largest companies are digital experts compared to eight percent in the US. The US is also well ahead of Asia-Pacific, where only one percent of non-exec directors have digital skills, according to the research by executive search company Russell Reynolds Associates.

The research defines a 'digital director' as someone who either plays a significant operating role in a digital company, has a primary digital operating role with a traditional company, or has two or more non-executive board roles at digital companies. The role of these execs, it argues, should be to ensure their organisation is making the most of their digital strategy, whether that is exploiting social media, big data, or raising cyber-threats awareness.

According to Russell Reynolds' analysis, only five boards in the FTSE 100 are "highly digital", those being Burberry, Easyjet, LSE, Sky, and Vodafone, and while 12 have one digital director there are 83 boards with no digital representation at all. The FTSE 250 companies are less digital, with 90 percent having no such expertise at the top table. And in the broader FTSE350, 88 percent of companies have no digital directors.

However, it seems having someone with digital smarts at the top table is a growing trend. The executive search firm said there were twice as many new appointments of digital NEDs in the past two years compared to 2010 to 2012.

Rhys Grossman, co-head of Russell Reynolds Associates' digital transformation practice, said the study highlights the competitive threat European companies face through their board level digital gap with their US counterparts. But many European companies are putting far greater focus on "digitising" their boards, so the proportion of digital NEDs is likely to increase to five percent by 2017, he said.

The study also showed that five companies - Apple, eBay, Google, Microsoft, and Yahoo - act as a global 'boot camp' for digital non-executive directors, with 36 percent of those in the top 300 companies worldwide earning their spurs in these companies.

It also noted a comparatively high proportion of women in the role of Digital NED. While on average only 18 percent of board members are women, this rose to 31 percent of digital NEDs.

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