Assessing the Impact of a Digitally Savvy Board on Company Performance

One of the most important issues company boards of directors face today is the role of digital technology as both an opportunity and a threat to the future success of the company. The board best equipped to meet these challenges has digital savvy, which we define as an understanding, tested by experience, of how digital technologies such as social, mobile, analytics, cloud, and the Internet of Things will impact how companies will succeed in the next decade. In research done over the last five years, we found that only 24 percent of the boards of companies that were listed in the United States with over $1 billion in revenues were digitally savvy, and that companies with savvy boards outperformed the others in our research on key metrics including ROA, revenue growth, and market cap growth. In this paper we share results from the research, experiences from board directors we interviewed, and insights on how to increase the digital savviness of boards.