Digital Boards

The increasingly decisive relationship between business and technology is bringing to the forefront, once again, the imminence of a digital revolution that will permanently reshape how companies operate. This whirlwind — feared much as the millennium bug was feared, or as the failed dot-com bubble once stirred anxiety — is now amplified by the growing incorporation of independent directors into corporate boards in pursuit of better governance.

If identifying and incorporating independent directors with knowledge and value-added capabilities different from those traditionally brought by shareholder-members already requires the support of specialized firms, adding "knowledge — or rather, understanding — of digital topics" has raised the challenge to an entirely new level.

The Board's Role: A Prior, Unavoidable Question

I deliberately say "understanding" rather than "knowledge," because before proceeding we must be clear about the board's role — in order to know the boundaries within which this digital director can genuinely contribute value.

Should the board establish the digital strategies that will guide the company's growth and future direction, or is this function properly the domain of its executives, subject to board approval? This question is critical for defining the digital director profile that is actually needed: one who proposes strategies, or one who understands, analyzes, and — why not — "translates" them for fellow board members?

"The board's role cannot be that of primary architect of the company's direction. How can you hold an executive accountable for results if the board wrote the roadmap?"

A Board That Sets Strategy: A Design Error

In our professional practice, we have consistently found that a board ill-suited as the primary architect of the company's direction — because if its strategies fail, the root cause would not lie with the executive team but with the board that created and imposed them. How can you hold an executive accountable for results if the board wrote the roadmap?

With that role clarified: while digitally native generations have not yet reached typical board-member ages, boards will need at least one member who understands and can interpret digital topics — someone whose function is to help fellow board members absorb the proposals of an executive team that is genuinely current on digital business challenges and fully aware of what those challenges entail.

The True Protagonist: The Digitally Skilled Executive

What is truly decisive is that executives be "digitally capable" — able to innovate, reimagine, and incorporate technologies into new business models, and to bring those models to the board for approval. Not the other way around. The board validates, questions, and approves; executives propose and implement. Confusing these roles is one of the most frequent causes of failure in digital transformation processes.

There is a common temptation: faced with a perceived scarcity of directors with digital competencies, companies turn to Generation X members or look abroad as though it were the only viable path. In the first case, they commit a conceptual error about the board's proper function. In the second, they undertake an unnecessary effort that, in most Latin American markets, can be fully met locally.

Still Relevant in 2025: The Board Facing AI

What was described in 2019 is now even more urgent with the emergence of generative Artificial Intelligence in business models. The question is no longer whether boards need to understand technology — that is self-evident. It is how to correctly distribute roles between those who oversee and those who execute the transformation. A board that immerses itself in technological operations ends up displacing the executives who should be leading it. And a board that is entirely oblivious to technology loses the ability to ask the right questions of those who do master it.

The balance — directors who understand without executing, executives who propose without waiting for the board to do it for them — remains the key to effective corporate governance in the digital era.

Originally published in Diario Gestión, 2019. Updated with 2025 perspective. Armando Cavero is Managing Partner of Top Search Peru, InterSearch Worldwide representative in Peru.