New York - Most corporate board members talk the talk about the importance of information technology to their company, but fewer are taking actions to align IT with overall corporate strategy. This is the overarching message coming out of a new survey, "The Board and Information Technology Strategies," by Deloitte Consulting LLP, a subsidiary of Deloitte & Touche USA LLP, a New York professional services provider, and Corporate Board Member magazine. The survey respondents also suggested a distinct and positive correlation between the attention paid to IT and corporate performance. The survey was conducted in the fall of 2006 and involved more than 450 directors of publicly traded companies with revenues of more than $1 billion. Financial services companies represented 19% of the mix, 7% in insurance. The directors responded to questions ranging from how often their boards discuss IT strategy to how they think IT has affected their companies' ability to effectively meet their business objectives. A significant gap does exist between the emphasis the board seems to place on IT and the things they are doing to address it, Larry Danielson, a principal with Deloitte Consulting who focuses primarily on the insurance industry, told Insurance Networking News. "This indicative of an insurance company board's comfort zone," says Danielson. "Boards are seasoned individuals who are asked to apply judgment on many different topics. In this regard, technology is a misnomer, because it's often thought of in the highly technical arena of software and hardware, when it's really about overall strategy, business change and improvement."  According to the Deloitte & Touche report, directors and senior executives blame this gap on the number of other things that have been hitting the insurance company board's agenda, namely regulatory compliance and top line growth. "Top line growth varies by segment," says Danielson, "but clearly the life area faces some hurdles. With the influx of Baby Boomers seeking better retirement returns, life insurers are struggling with what to do, because their infrastructures are not designed in similar fashion to a typical investment firm. An investment company's business model is such that they can see every day where they stand financially." Some of the key findings and trends from the survey include: * Boards are not involved to the degree they believe they should be in IT; directors did not indicate a commensurate level of activity with the level of recognition of IT's importance.* Ten percent of boards relegate IT matters to a board committee. * Only 11% of boards discuss IT at every meeting. * Fourteen percent of boards are "completely and actively involved" in IT strategy. * Directors who report a higher level of involvement in IT matters have a better understanding of IT's importance to their business and their performance. * Directors report that effectiveness in executing on IT strategy correlates to better financial performance.  Furthermore, the survey found that even though 22% of the respondents blame various aspects of IT strategy for their companies' inability to achieve its goals, 52% say their board will be spending no more time on IT over the next three years than it does now. The findings also indicated that when the CEO leads the discussion, boards are more completely and actively involved in IT. "In the not so distant old days, technology was more of a support system than an actual business strategy. Today technology and IT are key business strategies and typically are accompanied by capital budgets reaching as high as a billion dollars in larger companies," said TK Kerstetter, president and CEO of Corporate Board Member, a Brentwood, Tenn. publisher. "The days of not understanding IT in the boardroom are gone, and I expect we will see more CIOs and CTOs invited to serve as board members in the years ahead."  According to Danielson, this may not be the ultimate solution for insurance companies, but it's a start.  "It's important to get senior people to talk about technology," he says, "and as an adjunct, board members need to be better educated. They need a better understanding on lead-time for IT project completion, potential technology pitfalls and ultimate benefits. It's really about managing expectations upward."  Source: Deloitte & Touche USA LLP 

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