Assessing it competences of boards of directors: Perceptions of Malaysian CIOs

Abstract

Information technology (IT) systems are becoming increasingly indispensable for organisations in their daily operations. Organisations therefore invest considerable capital in IT assets to support the IT needs of employees and other stakeholders. As the contemporary global business environment becomes increasingly reliant on IT, the need for IT to be governed effectively and efficiently grows. Boards play a critical role in the governance of organisations, yet despite the continued call for improved IT governance, there has been little research into how boards actually govern IT. Current research indicates boards appear to struggle to understand the state of IT within their companies and/or they lack appropriate IT skills in discussing IT issues. This study therefore assesses IT competences of boards using a model developed from a review of IT competence frameworks in three domains, namely IT organisations/associations, professional accounting associations and academic research. The model is then tested, using Malaysia as a case study to evaluate the level of Board IT competence. Malaysia was chosen in light of the attention drawn to corporate governance in the 9th Malaysia Plan report. A survey instrument extracted from the competences model lists 33 current critical IT issues facing boards. It then asked chief information officers (CIOs) of companies, to evaluate the importance of each issue and the level of competence their board has to deal with them. The results appear to show that there is a difference in the ranking of importance of issues and the level of IT competence boards currently hold based on what CIOs consider appropriate within a company. The findings will contribute to the research base on board IT competences from a Malaysian perspective thus highlighting areas for further improvement. If successful, the model can then be used to evaluate the state of IT governance in other international domains