Bank of America Merrill Lynch head of Australian research, Sameer Chopra, made a case for adding more directors with a technology background to financial and consumer company boards at the recent Conexus Financial Equities Summit.

“I am staggered that many companies don’t have technology skills on the board. A number of companies in the banking sector would spend opex and capex north of $1 billion on technology,” Chopra told an audience of fund managers and superannuation fund representatives at the summit, held in Melbourne.

“It’s one of the biggest line items in financial services…It is actually the biggest line item in terms of expense. But there is no one on the board [in most cases] who actually has direct technology experience.”

The 2018 Board Diversity Index, released by executive search firm Watermark Search International, stated that while software, services and telecommunications companies make up 9.3 per cent of the ASX 300, only 4.6 per cent of total board members at ASX 300 companies have tech experience.

“This sector expertise is significantly under-represented across the ASX 300,” the report stated. “Given the integral part that technology plays in transforming business models across all sectors, we see this skillset as very underweight.”

Key ASX 100 financial companies AMP, Challenger, IAG, Medibank and QBE do not have technology-skilled directors on their boards. Big consumer company JB Hi-Fi is also lacking tech-savvy directors.

Many of these companies are, however, spending large amounts on technology; for example, AMP has committed more than $100 million to its digital financial planning play in partnership with US-wealth management giant United Capital.

Chopra said the Commonwealth Bank was an example of a board that does have board directors with a technology background.

CBA independent non-executive director Wendy Stops was formerly senior managing director, technology – Asia-Pacific, for Accenture, while the bank’s chairman, Catherine Livingstone, is a former chairman of Telstra and of the Commonwealth Scientific and Industrial Research Organisation.

“Technology is our focus right now. I think many companies need to get around to putting tech skills on public boards. Our engagement is about finding these companies and finding out what is going on,” Chopra said.

The Board Diversity Index states there is “still less than one technology ‘savvy’ board director for every three boards”.

“That broader representation drops even further if one considers the number of technology ‘savvy’ directors who are not in technology-related companies,” the report stated.

“Of the 96 directors with a technology background, 50 have seat on boards in the software and services sector,” the report states. “That leaves 46 directors spread across the remaining 274 companies, or one technology ‘savvy’ director for every six companies.”

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