Asking the Right Tech Questions

Even if they’re not technology experts, directors should be able to question management about how technology decisions support a company’s business strategy, says Louis J. D’Ambrosio, chief executive officer of Avaya, the $5 billion communications systems provider that was spun off from Lucent. D’Ambrosio talked about best board practices in an interview with Directorship at Avaya headquarters in Basking Ridge, N.J.:

We know that the era of godlike chief information officers has long passed. In your view, how should the C-suite work with the board to seize technology opportunities?

First and foremost, you have to get it on the agenda. At Avaya, we have IT on the full-board agenda at 70 percent-plus of our meetings. It’s IT in all respects, not just in its control perspective but also its support role and enabling perspective. The board cannot abdicate the technology discussion to the CIO or management. If management can’t describe the role of technology in plain English, then the board has to address management’s communications skills. Even though technology has a complexity to it, its purpose and function and utility have to be described in clear business terms.

Are directors expert enough to be involved in technology decisions?

Board members do not have to be programmers. They do not have to write code. They do not have to write complex software. But they have to understand, “If we’re going to be reporting our segment profitability externally, will our technology systems be able to address that?” If management makes a presentation about the ways they are changing pricing methodologies, it would be reasonable for a board member to ask, “Are we comfortable that the technology systems will be able to ascertain the kind of information we need?” If they want to improve customer satisfaction, it would be appropriate to ask, “What is the role of technology in changing customer experience? When customers speak to one of our people directly or interact with us through the Internet or contact one of our call centers, do they get three different experiences?”

All those questions have nothing to do with the intricacy of technology. They have to do with the imperatives of the business and appreciating the role that technology plays. Directors should not become experts on technology, but they need to be inquisitive about its role in helping the organization achieve its business objectives.

Should boards improve their technology smarts by adding different types of directors?

I think there is a learning curve. Our most recent board member was specifically put in place because of his technology expertise—Frank Fanzilli, the former CIO of Credit Suisse. The more important thing is not abdicating decisions to the specialists in management. For example, all financial decisions on a board are not abdicated to the chair of the finance committee or the audit committee. Or when an organization is going through an acquisition, is everyone on the board an expert in the nuances of an M&A deal? Is everyone a world-class financial expert? No. But will everyone on the board weigh in on whether an acquisition makes sense? Absolutely. On our board, one member has a background in leading very large commercial banks, Tony Terracciano. He’s one of the more engaged individuals in questioning whether the technology roadmap is consistent with our strategic vision. We also just brought on a new CIO, Lorie Buckingham. One reason I selected her was that she’s a business person first and a technologist second.

I’m not sure why a culture has developed in which board members can weigh in on topics where they’re not experts, but they don’t do that in technology. That must change over time. There is increasing responsibility and liability for board members. When it comes to what information is available and what information is identified, I’m not sure there’s anything more important than IT in presenting and illuminating that information.

Should boards have technology committees, or would a decision about, say, reporting and disclosure systems be made by the audit committee?

It depends on the board. I don’t think it’s a requirement to have a technology committee. In our organization, it’s done in three places. It’s done at the broader board meeting. It’s done almost always in the audit committee meetings. It’s also done through individuals like Frank Fanzilli, who are subject area experts.