Driving and enabling the shift to digital 3. Create a governance framework that puts digital at the heart Ruby Sharma, Principal, EY Center for Board Matters, Ernst & Young LLP, of the business says digital experience on the board can help guide management through Digital needs to be at the heart of the organization’s strategy and approach, changes in business models and disruptive forces. “It is important to consider including management decision-making. Many organizations’ governance having directors with digital experience in place to ask the right questions arrangements are out of step with the changes that have swept through the and challenge management to help organizations prepare for inevitable digital economy. CFOs and CEOs can, for example, work with the board in technological disruption,” she says. “By asking the appropriate questions assessing the readiness of the board as well as the overall digital talent pipeline of management, directors can help make better and faster decisions that and bench strength within the organization to help catalyze digital business improve business performance, manage risks and protect the company’s model innovation. The skills and makeup of many boards are designed around reputation and brand.” oversight of traditional issues, such as compliance, financial reporting or risk, 4. Manage the tax, legal and regulatory risks of digital and with fewer boards that exhibit digital leadership. There is a growing need for support digital growth plans organizations to have a digital-savvy voice in the boardroom. This is being reflected in an increase in the appointment of digital directors. Tax laws have struggled to keep pace with the digital economy. The gap between the evolution of the digital economy and the legislative ability to The digital-savvy board keep up creates uncertainty and risk. The following board directors bring a digital mindset and skills to their “It is an absolute requirement that CFOs, with their tax directors, sit down board responsibilities: with the CEO and say, ‘Given how our business model is going to change, here’s the way the tax model is changing,’” says Flynn. “Companies that do 8 • The Walt Disney Company — Sheryl Sandberg, Facebook this will help ensure that they anticipate risks and support their digital growth 9 ambitions. Companies that don’t plan on that are going to face much greater • American Express — Ted Leonsis, Groupon 10 controversy, including intense media and regulatory scrutiny and the risk of • Sainsbury’s — Matt Brittin, Google reputational damage.” 8. thewaltdisneycompany.com/about-disney/leadership/board-directors/sheryl-sandberg. 9. ir.americanexpress.com/Officers-and-Directors. 10. www.j-sainsbury.co.uk/about-us/management-and-board/board-of-directors/. Partnering for performance Part 5: the CFO and the chief executive officer 15