Last updated on April 23, 2014 at 21:24 EDT

PwC Annual Corporate Directors Survey Reveals Nearly One-Third of Directors Lack Sufficient Understanding of Information Technology

September 10, 2013

New ACDS data finds increased importance of IT but shows boards challenged in their oversight role

NEW YORK, Sept. 10, 2013 /PRNewswire/ — Information technology is a top priority for today’s boards as directors spend more time on IT and recognize the increased importance of effective IT oversight, according to new research released as part of PwC US’s 2013 Annual Corporate Directors Survey. With technology rapidly changing the way companies do business, more boards are turning to outside consultants for advice on IT strategy and risk oversight. Meanwhile, directors are also taking a close look at their companies’ ability to embrace digital transformation and strategically utilize emerging technologies.

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In today’s release, PwC provides an inside look at the area of IT oversight. Conducted in the summer of 2013, 934 public company directors responded to the survey. Of those, 70% serve on the boards of companies with more than $1 billion in annual revenue.

“The technology revolution is significantly impacting the boardroom, prompting directors to increase their time and focus on IT, reconsider their oversight approach and seek new ways to enhance their digital IQ,” said Mary Ann Cloyd, leader of PwC’s Center for Board Governance. “While directors have made notable strides to improve effectiveness of oversight, ensuring IT strategy and risk are woven into their company’s overall business plan remains a challenge.”

Key survey findings include:

    --  Increased importance of IT. Directors noted the increasing importance of
        the IT revolution at their companies--15% call IT critical, up from 13%
        in 2012. The amount of time directors spent overseeing IT increased
        correspondingly. Despite the fact that about one-third of boards spent
        more time on IT, 61% want to spend even more time considering related
        risks in the coming year, and 55% say the same about IT strategy.
    --  Seeking support from the outside. There was a jump in the use of outside
        consultants to advise boards on IT strategy and risk this year--up to
        35% from 27% in 2012. Even more directors are thinking about using a
        consultant in the future. While most were hired on a project-specific
        basis, the percentage of consultants engaged on a continuous basis more
        than doubled from last year.
    --  Challenges weaving IT into strategy and risk. Despite reporting
        increased recognition of the importance of effective IT oversight, 32%
        of directors still say they do not have a sufficient understanding of IT
        to support the company's strategy and IT risk mitigation. Additionally,
        only 22% of directors say they "very much" agree that the company's
        approach provides them with adequate information for effective
    --  Getting up to digital speed. The majority of directors have evolved to
        become more actively engaged in overseeing traditional IT issues. The
        status of major IT implementations and the annual IT budget reflect
        areas with the highest levels of director engagement (80% and 63%,
        respectively). At the same time, directors feel they are not
        sufficiently engaged in understanding the company's level of
        cyber-security spend (24%) and competitors' leverage of emerging
        technologies (22%), among others.

For more information or to download all 2013 survey findings specific to IT oversight, please visit: http://www.pwc.com/us/en/corporate-governance/annual-corporate-directors-survey/index.jhtml.

In addition, 2013 survey data on board composition, structure and performance is available for download at: Boards confront an evolving landscape–Board composition and behavior.

Further survey data on the following topics will be available from PwC US as follows:

    --  September 12, 2013--Executive Compensation and Stakeholder
    --  September 18, 2013--Strategy, Risk Management and the Regulatory and
        Governance Environment; as well as launch of the complete 2013 survey

About PwC’s Center for Board Governance

PwC’s Center for Board Governance is a leading resource for directors. By promoting leading governance practices, the Center advances excellence in the boardroom and is dedicated to better enabling boards and audit committees to perform their important roles. To provide timely updates to board members, the Center publishes the Annual Corporate Directors Survey, monthly BoardroomDirect, and offers forums for directors to discuss current issues.

For more information, please visit http://www.pwc.com/US/CenterForBoardGovernance.

About the PwC Network

PwC firms help organizations and individuals create the value they’re looking for. We’re a network of firms in 158 countries with close to 169,000 people who are committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at www.pwc.com.


Source: PR Newswire