The role of the board of directors in governing digital transformation

Digitalization has a profound impact on organizational strategy and risk exposures. As both strategy and risk are key concerns of the board of directors, researchers are increasingly calling for boards to be more involved in IT governance. Indeed, studies show that board-level IT governance is positively related to organizational performance and IT risk management. However, figures from practice indicate a lack of board attention to IT-related topics as well as a lack of board IT competence to adequately carry out IT governance duties. This research focusses on this knowing-doing gap by investigating how boards of directors can take up accountability and responsibility for governing digital transformation. We examine the current state of board-level IT governance literature and practice, gain a better understanding of board roles when IT governance is exercised as part of corporate governance, and focus on the board's IT strategic roles. Our findings suggest that, in order for boards to truly assume responsibility for governing digital technologies, IT governance should be regarded as an essential component of corporate governance. Furthermore, the board's IT expertise is a critical mechanism for carrying out IT governance responsibilities. Finally, the CIO plays an important role in increasing board involvement in IT governance. Showing that IT governance should be an integral part of corporate governance is critical to move the board-level IT governance literature forward. Second, we lay the groundwork for future research by presenting a conceptual model for board-level IT governance, as well as a research agenda. Furthermore, we demonstrate the utility of various theoretical perspectives in addressing governance issues. Third, we open up the black box of board-level IT governance in practice through case study research. Finally, we add to the corporate governance literature by providing insights on digitalization, which creates both strategic and risk-related challenges for governing organizations. For practice, our findings demonstrate the value of the board’s contribution in governing IT. Furthermore, we detail six roles that boards can take up to perform their IT governance duties and outline various governance mechanisms to implement them. We take a deep dive into one of these mechanisms, i.e., board-level IT governance committees, and a subset of these roles, i.e., the board’s IT strategic roles. In doing so, we hope to inspire boards of directors on how to shape their involvement in digitalization.

Publication year:2022

Keywords:Doctoral thesis

Accessibility:Open