THE RISE OF TECH DIRECTORS

ON CORPORATE BOARDS

And the Parallel Increases of Technology Committees on Boards

and CIOs as Board Members

October 23rd, 2013

© 2013 Copyright Vell Executive Search

Objective:

Help you understand the trends and offer some suggestions on working with and joining Boards.

Contents:

1. Driving Forces Behind this Trend

2. Tech Execs on Fortune 100 Boards: Overview, Demographics, Backgrounds

3. Tech Committees of the Board

4. CIOs on Corporate Boards – Examples

5. How to Get on a Corporate Board

Handouts:

1. CIOs Serving on Corporate Boards

2. Questions Boards May Want to Ask CIOs

TABLE OF CONTENTS

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McKinsey: “At least one Tech Savvy Board Member Enriches Strategic Discussions”

PWC: “60% of Directors Want more time on IT Topics (up from 36% last year)”

KPMG: Majority of Financial Inst., Tech, CPG/Retail consider “IT very important”

DRIVING FORCES

IT

Strategic to Boards

Large IT Projects & Investments

Security/Privacy/ Disaster Recovery

Game Changing Technologies

Competitiveness Assessment

CIO Role More

Strategic

More New CIOs “Sit at the table”

Deep IT Experts w/ Strategic Chops

CIOs Becoming CEOs

Increasing IT Complexity

Business Runs on IT

In the Fortune 100:

198 Board Seats are “Technology” Board Seats in the Fortune 100 (172 Unique Board Members)

71 companies have tech directors; 29 do not have tech directors

Some surprises: Goldman Sachs and Bank of America have zero tech directors. All retailers have tech directors, with Wal-Mart and Safeway topping the retailers’ list.

Narrow Tech Director Definition:

– Data Set: 2012 Fortune 100 Companies List –Proxy Data as of 5/2013. Primary area of industry or expertise is Tech, including all functional areas.

– We included executives with a good level of technology experience only.

– Examples:• Someone with two years as CIO of Goldman Sachs and not other tech experience doesn’t qualify.

• Executives with retail experience but strong digital experience are included.

• If an executive is Chairman of a Tech company and has no other tech experience, that individual was excluded.

TECH DIRECTORS ON THE F100

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76%

24%

Tech directors by Gender (Unique) -Percentage Share

Men

Women

4813

19 24 104 6 4

2

12 1

1510

8 8 43 3 2

2

0 0

Gender By Industry (Non Unique)

Men Women Overall

65.5

55.5

65

Median Age of Tech Directors by Gender (Unique)

TECH DIRECTOR DEMOGRAPHICS

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TECH COMMITTEES OF THE BOARD

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Fortune 100 Companies with Tech Committees:

• American Express, FedEx, GE, HP, J&J, P&G, Wal-Mart, and World Fuel Services

• Morgan Stanley has a Tech & Ops Committee with no Tech Directors

• Distinguish between IT/digital media strategy and R&D Tech Committees

KPMG’s View of Tech Committee Charters:

1. Staying abreast of new basic technologies and emerging technologies within and outside of the

corporation’s specific industry.

2. Understanding e-mail, Web and other security threats.

3. Advising on long-term strategic goals of the corporation’s science and technology investments.

4. Evaluating the corporation’s technology position in a competitive environment.

5. Acquiring and maintaining technology positions, including contracts, grants, collaborative efforts, strategic

alliances, mergers and acquisitions.

6. Finding a future CIO/CTO and staff.

7. Protecting the corporation’s intellectual property.

8. Providing guidance for data retention, privacy and regulatory-mandated record-keeping.

1. Gary Reiner, former CIO, GE, on HP’s Board and Citi’s board

2. Julie L. Bushman, EVP at 3M and deep IT roots, on Johnson Controls Board

3. Robert Dixon, CIO at Pepsico, on WellPoint’s board

4. John O’ Parker Jr., former CIO at SmithKline Beecham, Sea-land Corporation, Squibb Corporation and Baxter Healthcare on Express Scripts board

5. Rob Carter, EVP & CIO at FedEx, on the boards of First Horizon National and Sak’s Fifth Avenue

6. Carol Zierhoffer, CIO, Bechtel, on MedAssets board

7. Patty Morrison, EVP & CIO, Cardinal Health on Splunk’s board (real time operational intelligence gathering)

8. Doreen A. Wright, former CIO and SVP at Campbell Soup, serves and has served on many boards, including Crocs, Dean Foods and CNO Financial

9. Frank Ianna, former President Network Services at AT&T on Sprint’s board. Deep infrastructure and networking design experience

… plus many others… See Handout

CIOS ON CORPORATE BOARDS

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HOW TO GET ON A BOARD

• What are you best in class at? Big data, cyber-security, mobile, HCIT, Industry Perspective/ Knowledge

What is Your Unique Value Proposition?

• To contribute; to get a different perspective; to hone strategic skills, to set up board career, to work with really smart people

Why do you want to join a board?

• Customer Perspective, IT Transformation, Mobile, HCIT, SCM, Tech Trends Expert, Maverick Investor

Why would a board want you to join?

• Process is research intensive. Few people called.

• Be visible & accessible, so that you are on radar. What is the process and how do you

get on the radar?

• Take governance classes (NACD, educational institutions, etc.), attend local chapter events

How do you learn about governance?

• Questions boards may want to ask of CIOsHow do you engage your board in

strategic IT discussions?

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