Dr Ewan Kirk, UK tech investor, deep-tech guru and hedge fund founder, discusses the need for more STEM skills in boardrooms.
Ask an aircraft engineer how a plane works and they’ll give you a detailed breakdown on the inner workings of an aircraft engine. Not only that, they’ll also have an intimate understanding of all the parts and components that make up the engine, as well as the specific role they play in making the plane fly.
So why don’t directors on a company’s board understand the technology that makes a company run smoothly and unlocks new commercial opportunities?
‘There’s a disconnect between the technology that lays the foundations of a business and the decision-makers that sit at the top’
Long gone are the days when technology only facilitated specific functions within a business such as an online sales platform or a payment cycle. It now dictates almost each and every part of a business.
Even the most traditional and manually driven companies rely on the latest technology and software. Retail companies use cloud computing and machine learning to manage stocks and forecast in-store demand. Construction companies use structural planning models to erect new buildings cheaper and faster. And mining companies use complex mathematical models to understand existing and potential drilling operations.
However, as it stands, there’s a disconnect between the technology that lays the foundations of a business and the decision-makers that sit at the top. This can seriously undermine the performance and growth of a company, and only STEM representation at board-level can bridge this gap.
STEM skills and knowledge play a crucial role in the modern economy, and we’re mostly seeing this at the entry level. Whereas STEM graduates have traditionally been attracted to academic fields or research-heavy sectors, they’re now being drawn to more commercial and corporate opportunities.
A computer science graduate might first look to the investment and finance sector to ply their trade, or a mathematician might leverage their expertise to help grow a tech start-up. But it will be years, often decades, before these graduates fill senior leadership roles and ultimately dictate a company’s direction of travel.
The model for a traditional board comes from an era when businesses didn’t rely on computers, data and artificial intelligence to launch new products or manage day-to-day operations. While the cliché of board members being old, dusty, pen-and-paper-wielding dinosaurs is a little tired, it does nod to an endemic issue that is holding back businesses.
The Australian Institute of Company Directors estimated in 2020 that a measly 3pc of directors in the country have a background in STEM. The fact that it’s impossible to find a similar metric in the UK and Ireland suggests we’re not far ahead, and possibly even fall behind.
Calls are growing increasingly loud for more ethnic and gender diversity at director level – a cause I am deeply passionate about. This will help bring fresh perspectives and unique experiences into our boardrooms, but adding intellectual diversity through STEM representation will unlock operational, commercial and governance benefits for companies.
I’m not asking directors to learn complex algorithms or for boards to introduce code-writing sessions to their meetings. But they do need an understanding of how new technology shapes the organisations they lead.
‘It’s not sustainable for the less technologically aware to rely on the subject matter experts to explain how their company actually works’
Perhaps the biggest benefit this can bring is commercial. If you know how science, technology, engineering and maths can be applied in a business setting, you can foresee new trends that could help you get ahead of the competition.
Take Domino’s for example. The pizza chain famously turned around its fortunes in 2008 when it introduced chatbots and social media-enabled ordering well before these technologies were part of the e-commerce infrastructure. It marked a seismic shift for the company. Its stock price soared over the following decade.
The company used AI and machine learning to revolutionise an industry that had previously thought the best way to get a pizza from the oven to your front door was a landline phone and a moped. It kept Domino’s relevant in a hugely competitive market and ushered in a new era of cheese-filled consumer convenience. But would the company’s senior decision makers have had the confidence to invest significant corporate resources in such a fundamental shift in strategy had they not understood what a chatbot or social media was?
Technology continues to evolve at a rapid pace and there are some big changes on the horizon that will have a big impact on business.
But STEM representation goes well beyond product innovation. It’s becoming an integral part in corporate governance itself. Directors must be sufficiently knowledgeable about the inner workings of the company to be answerable for its actions. This isn’t a “nice to have”, it’s a legal requirement.
Board members from finance and legal backgrounds may have an intimate understanding of corporate administration and legal lingo, but the line between corporate governance and tech-driven operations is becoming increasingly blurred.
Ask a board member of a mobile phone company how it utilises hyperscale cloud computing technology to record sensitive customer data, and it might draw a blank look. But no longer can this be considered an innocent, blissful ignorance. It’s not sustainable for the less technologically-aware to rely on the subject matter experts to explain how their company actually works.
STEM representation also brings a host of other benefits to a company. It offers fresh and interesting perspective that drives innovation. It brings a strictly evidence-based mindset that helps tackle new challenges. And it helps boards simplify the growing complexity in corporate decision-making.
As it stands, the absence of STEM representation in boardrooms is a silent killer for future business growth. Every other department in a company is adapting new technology, and it is time our boardrooms did the same.
By Dr Ewan Kirk
Dr Ewan Kirk is a British technology entrepreneur, deep-tech guru and the founder of UK hedge fund, Cantab Capital.
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