A DD checklist for the nominating committee: if adding a digital director is a powerful way of increasing the digital competency of a board, doing so successfully requires forethought and planning.

• Author: Usina, Nada
• Position: DIRECTOR RECRUITING

EVERY COMPANY TODAY must confront the reality of digital transformation--how social, mobile, cloud computing and data analytics are changing the very nature of its business, its products and its place in the market. Because digital transformation affects the entire enterprise, the board is being called upon to provide oversight and counsel to the CEO regarding digital strategy and the development of digital talent across the C-suite. And because the CEO must ultimately be the one who drives the digital vision, it also affects how the board manages the CEO succession process.

Boards have begun to respond by adding "digital directors"--executives who have either management or board experience at a company where digital contributes a large portion of revenue, where digital channels are crucial enablers of business or where the company is regarded as a digital transformation leader in its industry. As my colleague Charles Tribbett III pointed out in a recent DIRECTORS & BOARDS webinar, 57 percent of the largest U.S. public companies now have at least one digital director.

If adding a digital director is a powerful way of increasing the digital competency of a board, doing so successfully requires forethought and planning. The following can serve as a checklist of questions and issues the nominating committee should consider.

* Know where the pain is. Often, companies increasing their focus on digital issues find that they need greater digital competency not just in the boardroom but in the C-suite as well--whether in their in-house digital function; in the overall digital savvy of their marketing and product development functions; or with the CEO himself or herself. Realize that a digital director will be able to give the much-needed advice and counsel regarding these roles, but he or she will not be able, as a director, to execute them. Adding a digital director, then, may only solve part of the company's capability problem.

* Determine the remit. Expecting a digital director to simply be a general resource for the board on all things digital could lead to frustration for all concerned--the topic is simply too broad. Instead, think through exactly where the director is expected to add value. Will he or she be asked to sit on the strategy committee or lead the innovation committee? Act as a "door-opener" to contacts in Silicon Valley? Advise the CEO on assessing the company's internal digital leadership? These and other questions will help the...