Russell Reynolds Associates: Study of Digital Directors

The digital transformation of business is dramatically changing both the products and services companies produce as well as the processes used to produce them. In today’s environment, every aspect of business has a digital component. To understand how boards are responding to the digital transformation, Russell Reynolds Associates launched an analysis of the digital capabilities of boards around the world.

The findings are skewed geographically, almost all of the highly digital boards are in the U.S., only two are in Europe and none are in Asia. The report found that 16 of the 100 largest public companies in the United States had highly digital boards. Only nine of those companies were in the technology sector (Apple, Cisco, Dell, Google, Hewlett-Packard, Intel, Microsoft, Oracle and Amazon.com), seven are from a range of non-tech sectors (Wal-Mart, Berkshire Hathaway, Procter & Gamble, FedEx, Coca-Cola, Allstate and American Express).

In 2012, boards began to strengthen their digital capabilities by adding new members. For example, Wal-Mart added Marissa Mayer, CEO of Yahoo! and Williams-Sonoma added Lorraine Twohill, Google’s Head of Global Marketing. These key moves provide valuable insight for boards looking to improve their digital transformation.

To refine their digital board composition, nominating committees will have to look beyond the digital powerhouses of Google, Facebook and Yahoo! to access talent. The ideal endpoint for many boards will be to have several board members brought on to anticipate the digital future. Bringing on digital board members should not be reserved for when a company is going through turmoil.

The full report is published on Russell Reynold Associates’ website. Read the full report.