By: Joseph Yaw ASUMANG
According to Deloitte’s 16
th
In the 2025 annual Tech Trends report, the business case for growth indicates that the most lucrative prospects are expected to arise from the merging of industries and technologies.
This view supports the emerging trend where businesses are overwhelmingly dominated by technological advancements, highlighting how closely intertwined the commercial sector has become with technology. However, in Ghana, this crucial element is poorly reflected in the boardroom, which serves as the highest authority for corporate governance.
Is the underwhelming performance of technology in the boardroom indicative of a basic misalignment between technology governance and corporate governance, thereby undermining the board’s ability to oversee technological matters effectively?
The strong case for improved coordination between technology governance and corporate governance remains valid when we consider the roles played by the board and executive management as the principal and agent, respectively. Both parties share a common duty to act in the best interest of shareholders within the broader framework of IT management and comprehensive corporate oversight.
The distinctive role of technology as a crucial yet risky strategic tool for achieving business success underscores the importance of alignment.
The board holds a crucial duty and significant position in adjusting the relationship between IT governance and corporate governance, aiming to strengthen its ability to oversee technological aspects for successful business outcomes.
THE CHALLENGE
The impact of digital technology on businesses has been substantial according to many, given the widespread digital transformation affecting the corporate world. Nonetheless, technological advancements have yet to become a common presence in boardroom discussions.
The lack of broad implementation of technology within corporate governance practices highlights a discrepancy between IT governance and overall corporate governance structures.
Historically, board compositions have favored individuals primarily from business-oriented fields like accounting, economics, sales, or finance, along with an occasional member possessing specialized expertise in areas pertinent to the company’s main activities—such as engineering, telecommunications, or information technology.
The backgrounds of the board members from a cross-sectional selection of companies listed on the Ghana Stock Exchange were analyzed, yielding the following outcomes.
|
Member Professional Background |
Percentage |
| Accounting/Finance/Banking | 41% |
| Marketing | 2% |
| Business/Economics/Management | 26% |
| Law | 5% |
| Risk | 1% |
| Engineering | 7% |
| HR/Psychology | 3% |
| Biology/Chemistry/Pharmacy | 5% |
| Information Technology | 9% |
Survey of Board Member Professional Backgrounds Among Listed Companies in Ghana
21
st
March 2025
According to the survey, approximately 70% of board members possess expertise in areas such as accounting, finance, banking, economics, and management, whereas merely 8% have a technological background.
The proportion of members with a technological background across all the consolidated non-banking firms decreases to 5%, and 60% of these organizations have no members with such a background whatsoever.
Among all the banking firms examined, each has at least one member possessing technological expertise, representing 11% of their overall membership. This situation likely stems from explicit instructions provided by regulatory bodies concerning the oversight of cyber security risks.
Worldwide, Gartner forecasted that by 2026, seventy percent (70%) of boards would have at least one director with specialized knowledge in the area. About a year back, Forbes shared comparable views in their 2024 cybersecurity forecasts and proposed that in 2025, boards ought to forge a fresh direction acknowledging that maintaining current practices within the boardroom is inadequate to tackle the distinct challenges and prospects presented by the digital age ahead.
The issue at hand is that generally, current practices in corporate governance do not align with the actual emphasis on technology in businesses today.
For IT governance to be effectively integrated with corporate governance, it needs to strengthen board oversight concerning technological matters. This integration ensures that technology can play a crucial role in achieving strategic business objectives and safeguarding information security, thereby supporting overall business pursuits.
IT Governance and Corporate Governance
The main issue at hand is, precisely how does IT governance relate to corporate governance, and what justifies the demand for improved synchronization between them? Both IT governance and corporate governance represent distinct yet interlinked sets of guidelines.
Although IT governance pertains specifically to the subset of the IT function, corporate governance oversees the entire organization. It is essential to view IT governance as a crucial component of corporate governance. This broader framework encompasses various processes, protocols, and principles designed to manage an organization effectively, ensuring ethical, legal, and efficient achievement of its goals.
Corporate governance:
Corporate governance refers to the framework used for directing and managing businesses, where the board serves as the top governing body. It holds the duty and power to guarantee the proper and moral functioning of the organization in the ultimate service of every stakeholder’s interests.
A portion of the board’s duty for overseeing operations ethically and effectively is handed over to executive and senior management for routine tasks; however, the board maintains final responsibility and accountability to stakeholders.
IT governance:
In turn, IT governance is tasked with offering a systematic method through established guidelines for policies, procedures, processes, controls, security measures, and accountability. This ensures the strategic oversight of IT assets within an organization aligns effectively with the company’s overarching objectives.
This primary objective focuses on guaranteeing that technology expenditures align with overall business goals. Numerous IT management and governance models, including COBIT (Control Objectives for Information and Related Technologies), ITIL (Information Technology Infrastructure Library), and established enterprise architecture structures like TOGAF (The Open Group Architecture Framework), emphasize the importance of synchronizing IT initiatives with corporate strategic plans as a core aspect of efficient IT oversight.
Shared fiduciary responsibility:
The main goals of corporate governance trickle down into IT governance, which primarily aims to synchronize tech-driven tasks with the strategic ambitions of the company to ensure that investments in information technology generate value for the business.
The primary aim of IT governance is also to manage IT-related risks efficiently and to ensure the effective utilization of IT resources. The particular objectives and emphasis of IT governance align closely with those of corporate governance, particularly in safeguarding shareholder interests by guiding the organization towards its strategic goals.
Key components implicitly present in both structures, such as strategic alignment, effective resource utilization, accountability, and risk management, underscore the interwoven relationship between IT governance and corporate governance, indicating a mutual duty of stewardship.
THE CHANGING PLACE OF TECHNOLOGY IN BUSINESS
In contemporary times, technology and business have grown deeply intertwined. The development of leveraging IT systems for business purposes, a trend that began several decades back, has gained significant momentum in our current digital era.
The dawn of the 1990s marked the beginning of an era where technological advancements started playing a pivotal role in shaping businesses.
The digital age:
The present era of digitization and its manifestation through digital transformation have firmly established an unbreakable link between technology and commerce.
Digitization efforts, whether part of a comprehensive and intentional transformation program or as targeted and spontaneous applications of digital tools for specific business challenges, aim to forge connections between increased efficiency and desired business results via technological means.
Today’s discussion about technology’s impact on businesses underscores how crucial it is for shaping corporate strategies and streamlining operational processes.
The reliance of businesses on technology is clear and broadly acknowledged. Just think about the main topic of the 2025 World Economic Forum – “
“Collaboration for the Era of Intelligence” –
To grasp the critical role of technology in both corporate strategy and the broader economic landscape.
TECHNOLOGY’S HIGH RISK
We observe a growing impact of technology on businesses’ total operational and reputation-related risks, as technology has become essential for daily activities.
Single point of reliance:
If the fundamental technology systems stop working, most businesses would find it difficult to continue their normal operations. Despite careful planning for redundancies and disaster recoveries, this heavy dependence on technology means that businesses face considerable potential threats from technological failures impacting their day-to-day functioning directly.
High cost of technology:
Eye-catching headlines about rapidly increasing worldwide Information Technology expenditures frequently dominate discussions regarding technology’s influence on businesses, serving as an ongoing prompt for enhancing financial management strategies.
Gartner forecasts that global IT spending will reach $5.61 trillion in 2025, marking a rise of 9.8% compared to 2024. In most instances, expenditures on technology exceed those for other categories within budgets. Leading sectors allocate as much as 11% of their revenues towards tech, whereas the international average stands between 4% and 7%.
No matter how you view it, spending on technology represents one of the largest components of an organization’s budget. The increasing worldwide investment in technology directly influences how risk is viewed within tech sectors.
Information as an essential asset:
A significant risk factor related to technology arises because information serves as a crucial asset for organizations in our digitized era, with the IT department typically overseeing most of these informational resources.
ITS long-standing duty regarding information security has transformed into the specialized field of cybersecurity, primarily due to digitalization. As a result, cybersecurity has become the governing mechanism for overall information security, offering a systematic approach to manage information security risks within the organization.
With the continuous rise of cyber threats paralleling enhanced digitalization efforts, cybersecurity has emerged as a critical component providing a systematic and stringent framework for strategically managing and addressing information security risks.
THE NEED FOR ALIGNMENT
The rationale behind aligning IT governance with corporate governance stems from technology’s increasing strategic importance in rapidly digitizing business landscapes and the obligations imposed by the board’s designated duties.
The pivotal role of technology in business strategy:
Given the significant reliance of businesses on information technology, along with the intrinsic cyber risks and substantial resource consumption associated with IT, this function has become strategically vital and necessitates appropriate focus within managerial practices. Considering the high strategic value of technological advancements, the connection between IT governance and overall corporate governance naturally emerges as crucial.
The primary aim of IT governance is to synchronize technological endeavors with the strategic goals of an organization, ensuring that investments in information technology generate value, risks associated with IT are managed proficiently, and resources are utilized efficiently.
IT governance should thus be considered a crucial component of overall corporate governance. Its purpose is to facilitate the optimal achievement of organizational goals while safeguarding the equitable interests of all parties involved.
Responsibilities of the board:
Aside from the theoretical debates, the requirement for alignment stems from the fundamental role of a quartet of essential duties anticipated to be carried out by the board. Upon thorough examination of these responsibilities, it becomes evident that they encompass technological aspects, thereby necessitating a focus on technology within the board’s considerations.
Task 1: Establishing Strategy and Structure
It is anticipated that the board will supervise the evaluation of strategic alternatives to identify a feasible approach and devise methods for implementing this strategy. Given its critical role as a primary facilitator of strategy, technology should receive adequate attention to guarantee seamless integration between technological advancements and business objectives.
The board is likewise anticipated to verify that the company’s organizational framework is suitable and competent enough to achieve the strategic objectives.
The accountability for maintaining an appropriate structure should specifically trickle down to the technology department, thereby ensuring that technology effectively supports the organization’s objectives.
The requirements of modern businesses driven by digital advancements and innovation necessitate greater flexibility in how technology is handled. This hinges significantly on the configuration of the IT organizational framework. Multidisciplinary teams are increasingly adopted as standard practice for implementing agile methods.
The board needs to oversee ensuring that appropriate conditions are established for developing a technology-focused business strategy along with building a capable organizational framework centered around innovation for effective implementation.
Task 2: Assigning Responsibilities to Management:
Executives and top-level managers receive their power from the board; consequently, the board holds the duty to sustain an efficient oversight system aimed at investigating, supervising, and guiding organizational activities.
This process usually involves maintaining oversight via transparent dialogue with high-level executives and managers, complemented by different types of management reports presented to the board concerning established guidelines, strategies, and operational efficiency metrics.
To ensure the board keeps its attention on technology, overseeing this aspect should be a primary responsibility of the board members.
As part of their oversight duties, the board members should have visibility into how effectively information technology is being managed concerning strategic alignment, control mechanisms, risk management efficacy, and operational efficiency.
Ultimately, the principal-agent dynamic within Agency Theory comes into focus here. This theory illustrates that transparency regarding the quality of services provided by an agent to a principal can lead to a reduction in losses.
Task 3: Practicing accountability and duty towards shareholders and stakeholders:
The requirement for being accountable to shareholders and responsible towards various stakeholders directly influences why technology governance should be emphasized and upheld more significantly within the realm of corporate governance.
Accountability to shareholders is involves the need to balance competing short term versus long term interest as well as directly conflicting interests of different shareholders.
Acquiring and utilizing technology, typically requiring significant financial outlay, frequently becomes part of the usual business dilemma where decisions weigh current investments against future benefits.
Hence, the board needs to have a solid understanding of the subtleties involved in technology investments and implementations, as well as their genuine impact on business results, so they can make informed tech-related choices to safeguard shareholders’ interests effectively.
By equipping itself with appropriate and necessary expertise in relevant domains for tech-related matters and decisions at the board level, the board can more effectively exhibit knowledge-driven accountability and responsibility towards both shareholders and stakeholders.
Task 4: Risk Management:
The board must ensure that management assesses all types of risks and identifies the most effective ways to mitigate them.
Technological risks form a significant part of overall operational risk. Given the escalating cyberthreats due to greater digitization in businesses, ensuring information security or cybersecurity has underscored the necessity for robust technology governance. Consequently, boards must prioritize providing adequate oversight regarding their organization’s information security efforts and achievements.
The significance and intricate demands of handling information security risks underscore the necessity of synchronizing IT governance with overall corporate governance to improve the board’s supervision.
FILLING THE VOID-THE IMPORTANCE OF THE BOARD’S ROLE
The four crucial steps required are as follows: Firstly, the board needs to recognize the shortfall due to the misalignment.
Secondly, it needs to develop the necessary capabilities to enable alignment, and thirdly, integrate technology securely under board supervision by setting up appropriate oversight mechanisms and communication pathways. Lastly, the importance of IT governance should be elevated to ensure coherence between technological practices and overall corporate governance.
Recognizing the importance of coordination:
The initial move toward attaining alignment involves the board recognizing that there is a necessity to enhance their supervision of technology-related matters more efficiently.
Recognition stems from the board’s inherent curiosity about enhancing their understanding of technological issues or evaluating their own performance, thus reflecting the hallmark of a proficient board. This recognition is rooted in the board’s commitment to balancing stakeholders’ interests and optimizing resource utilization as they strive toward achieving organizational objectives.
As technology becomes increasingly integrated into business strategies, it is clear that a clearer and more precise emphasis on technological matters and their influence on organizational objectives is necessary.
Capacity building:
Like all operational units, the board requires sufficient capability to perform efficiently. Building this capacity typically begins with the combined professional and technical expertise of the board’s membership.
Overall, technology continues to be notably underrepresented in boardroom discussions, a circumstance that diminishes the link between technological advancements and corporate governance. To bridge this gap, it is crucial for boards to intentionally work on improving their proficiency regarding technology-related matters.
This objective can be achieved by guaranteeing sufficient inclusion of tech-related skills at the board level to improve the board’s supervision over how effectively technology is performing.
Setting up governance frameworks for company technological management:
A key aspect of the board’s role, as part of fulfilling its oversight duties, involves delegating specific responsibilities to particular board committees.
Hence, it is crucial for the board to support the establishment of a robust governance framework for technology by forming a dedicated subcommittee focused on tech-related matters. This subgroup would supply specialized technological expertise, ensuring better alignment between technical aspects and overall corporate governance principles.
Increasing the importance of IT governance:
Besides the aforementioned measures, the board should also implement actions to guarantee that IT governance is robust. The oversight emphasis should be placed on these particular areas and objectives:
- Aligning technology with business strategies to achieve corporate objectives
- Technology service delivery effectiveness and integration with customer experience strategy
- Strategic Investment in Technology and Monitoring of Cost-Benefit Impact
- Efficiency in project management and execution
- The effectiveness of resources and productivity within an IT organizational structure
- IT Operations Resilience and Security
- Successful IT audit for governance, risk, and compliance oversight
CONCLUSION
Aligning corporate governance with IT governance is suggested by the specified duties of the board and the requirements brought about by today’s evolving landscape, which emphasizes the intricate relationship between technology and business operations.
The distinctive placement of this issue strongly argues for it to receive significant attention from the board. This duty underscores the board’s fiduciary obligation toward the organization’s stakeholders, extending naturally into IT governance. At its heart lies an imperative to harmonize technological advancements with business strategies and ensure effective and dependable utilization of these extensive tech assets.
Consequently, integrating IT governance closely with corporate governance has turned into a requirement within today’s commercial landscape.
Unfortunately, the actual situation does not align well with the necessity for concentrated attention at the board level, given the overall lack of expertise in the technological field among board members.
Among other responsibilities, the board must possess essential understanding of how the company operates. They should also ensure a suitable equilibrium between immediate and future-focused strategies in their choices to propel the business ahead, along with keeping strict oversight.
All these comprehensive directives along with the particular responsibilities assigned to the board collectively emphasize the necessity for increased focus on technological advancements.
Boards must contribute to aligning IT governance with corporate governance by initially recognizing the disparity and the necessity for improved coordination. They should then take measures to increase their own capabilities regarding technological expertise, followed by establishing appropriate frameworks to facilitate effective supervision over IT governance activities.
WRITER’S BIO
Joseph serves as an Information Technology Strategist, bringing considerable expertise in technology advisory and management roles. He assists organizations in maximizing the benefits of their tech investments via well-executed transformation strategies and ensuring high-quality implementation.
Email: [email protected]
Linkedin:
https://www.linkedin.com/in/JYA-02082015
Telephone: +233 552570751
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).