Trend: CIOs in the Boardroom - ' Another Set of Eyes '

Another Set of Eyes

Two other key ways CIOs add value to boards are by helping hire the CIO and conducting capital investment reviews. Hopper and Zoghlin both interviewed United Stationer's new CIO; similarly, technology veteran Richard Nolan, professor of management of technology at Harvard Business School, helped hire a new CIO at the Great Atlantic & Pacific Tea Co. Nolan, the former chairman of Nolan, Norton & Co., was recruited to A&P's board by a former vice chairman, now retired, who wanted him to help choose the vendors and monitor the execution of the $350 million replacement of A&P's legacy technology systems. Nolan says he also was asked to monitor the project's three-year implementation.

A financial expert, Nolan also chairs A&P's audit committee, overseeing not just accounting practices but information systems related to financial and operational controls. Nolan shares the view of a number of CIOs who believe the audit committee is the logical overseer of corporate IT, given that the IT department and the audit committee are both charged with responsibilities such as internal control systems, disaster recovery planning and business continuity planning.

What does it take to convince a recruiter that a CIO is ready to step into the boardroom? Jeri Lose, CIO of St. Jude Medical in St. Paul, Minn., wondered the same thing when Thomas McLane, vice chairman of the Directorship Search Group in Greenwich, Conn., called her about joining the board at Apria Healthcare Group Inc., a $1.3 billion home healthcare firm based in Lake Forest, Calif. McLane says that his recruiter spec sheet called for a high-ranking executive from either the healthcare or pharmaceuticals industry, integrity, a high level of intellect, ability to make the time commitment, judgment and common sense. Also required: demonstrated leadership outside his or her day job.

Lose says her breadth of skills was most appealing to Apria. She had worked in IT at Ernst & Young, in accounting and IT at General Mills, and ran a small business until 1984. She could bring to bear both her finance and IT expertise, and in fact has since participated on the Apria audit committee and helped frame a broad IT risk assessment. She also reviews IT documentation procedures and the top ten business initiatives that involve IT services. Of other CIOs looking for similar positions, she says, "They're going to need to be focused 80 percent on the business the company's in and 20 percent on the technology."

But you can bet a CIO on a non-tech company board will always be called upon for the "lucky-strike" extra of IT expertise. Back at Hershey Foods, when the board set out to replace director Allan Loren, who resigned owing to his workload as CEO of Dun & Bradstreet, the nominating committee didn't bring in just any business generalist. It tapped Avon CIO Edelman.

To be sure, Edelman, elected to the Hershey board in April, wasn't wooed strictly as an IT troubleshooter. After all, she rose through the ranks at Avon in marketing, operations and customer service, and in 1998 was named head of global operations at Avon. Edelman has also served on the Blair Corp. board since 2001.

Still, though, no one had forgotten the 1999 SAP implementation fiasco that triggered the first CIO board appointment. After the SAP foul-up, says retired director Pietruski, the Hershey board made a decision about the importance of technology expertise that has carried through to this day: "[IT] understanding and ability is needed on the board."

Bill Birchard, a freelance journalist based in Amherst, N.H., writes about business, the environment and healthcare. His work has appeared in Chief Executive, CFO, Fast Company and Strategy + Business. His 1999 book, Counting What Counts, written with Marc Epstein, lays out a plan for companies to boost performance through accountability. Please send comments about this story to editors@cioinsight-ziffdavis.com.