According to the Gartner 2022 Board of Directors (BoDs) survey, 57% of respondents have increased or expect to increase their risk appetite heading into 2022.
BoDs cite economic uncertainty (38%), disruptive business models from competitors (35%) and cost inflation due to supply shortages (28%) as the top risks to business performance.
“During the pandemic, BoDs recognized that they needed to become comfortable operating in an environment of significant risk, as standing still was not an option,” said Partha Iyengar, distinguished research vice president at Gartner.
He went on to add this drove them to embrace the ‘try fast, fail fast approach.’
“Into 2022, BoDs will continue taking risks such as making technology investment decisions with incomplete information or making financial bets without up-front visibility around a guaranteed return,” he added.
Digital Technology still a top priority
BoDs remain highly committed to digital technology initiatives, which was ranked as a top strategic business priority by 58% of survey respondents. However, this is a slight decrease from the 2021 survey (see Figure 1).
Figure 1: BoD’s top 7 strategic business priorities for 2022/2023
Iyenger opined that having invested so much in digital business over the past 12 to 18 months, enterprises are taking a pause to validate their strategy and ensure ROI.
“For BoDs, the core focus is now on technology integration and creating a more enduring and systemic digital economic architecture, where technology is infused throughout the business and drives business outcomes,” he continued.
The survey found that 64% of BoDs have attempted to alter their enterprise economic structure to a more digital economic architecture – meaning they are changing their capital allocation and governance approaches to accommodate digital investments.
As example, 40% of BoDs have moved digital business-related budgets to business functions, rather than a central technology or IT budget; one-third are changing the metrics used to evaluate ROI from digital investments.
While Boards are shifting focus to the role of technology beyond IT, CIOs remain visible as a key partner in BoDs’ digital initiatives. About 34% of BoDs report having a formally constituted IT, digital or technology subcommittee, and 94% among them include the CIO or CTO as a member.
Rising focus on workforce and social issues
Workforce issues were among the top strategic priorities for 52% of BoDs, representing an 86% increase in interest over the 2021 survey.
“Workforce concerns are closely linked with technology transformation,” said Iyengar. “As enterprises accelerate their digital business initiatives, issues such as the IT skills shortage, the need to create a digitally agile workforce and culture transformation become that much more critical.”
Environmental, social and governance (ESG), health and sustainability rounded out the top three BoD priorities, up by 100% from last year. The survey found that 30% of BoDs report that their organization publicly engages in leading social or political issues. Less than half or 45% have diversity, equity and inclusion (DEI) on their board meeting agenda at every board meeting or quarterly.