Technology is now essential for company directors as fraud costs hit $8.5 billion in Australia.
For many years boards have been running companies and the directors who sit on those boards tend to be very experienced business leaders who have been around for a while.
Often long enough that they are not very tech savvy.
So it is interesting to see that this year the Australian Institute of Company Directors (AICD) has issued its director update as an electronic document and has suggested it be downloaded before attending the briefing as no printed version will be provided.
This is great as it means several trees won’t be chopped down to print the booklets. It also means a large cost saving for AICD.
More importantly it sends the message that company directors now need to get to the point where they are tech savvy enough to use a PDF document.
I note the format of the document has not been updated from previous years so there are still sections of the document for hand-written notes to be added. This leaves me wondering how many directors will turn up with versions they or their assistants have printed on paper.
None of us take to change rapidly and for those over the age of 55 IT came along after they finished studying at university.
These people are far from digital natives and many of them will never take to it.
Interestingly in this directors’ update there is content on technology, cybercrime, social media, real-time dashboards for faster reporting, managing risk and fraud.
The update suggests that board members need to update their knowledge or add technology competencies to their team.
Of course, the perfect new board member must be a digitally aware female so the boards can reach their requirements for female representation and digital understanding and governance all in the one hire.
AICD also observe that; “Researchers have found that digitally mature boards with digital literacy, financially outperform their peers by 9% are up to 26% more profitable, and have up to 12 per cent greater market valuation.”
Included in this update for directors regarding their technical capabilities is a suggestion that they build familiarisation with the Privacy Act and their responsibilities to protecting private information.
This, of course, is in light of recent security breaches announced by Kmart and David Jones.
Without mandatory reporting of breaches it is likely there have been many more leaks that have gone unreported and in some cases undetected.
In relation to fraud we can draw a strong link to IT systems again, well-managed systems with good reporting especially via dashboards are likely to show up the tell-tale signs of fraud early in the cycle and the collection of forensic evidence on the internal network is likely to lead to finding the source of the fraud faster.
In short the days of boards ignoring the IT department and its requests for funding to detect, report, prevent and repair cyber-attacks is coming to an end.
Before much longer there will be little tolerance for companies that did not invest in the right technologies to prevent cybercrime and fraud.
In recent news from the AGMs of publically listed companies shareholders have been requesting information on the IT budgets and how they are being spent to ensure the profits are not eroded by cybercrime losses.
The shareholders want their assets and the reputation of those assets protected.
David Markus is the founder of Combo – the IT services company that is known for business IT that makes sense. How can we help?