As technology continues to shape how companies operate, boards are under increasing pressure to support forward-thinking ideas while adhering to laws and ethical values. Whether it is artificial intelligence, blockchain, cloud computing, or automation, these tools have opened new avenues for business. However, with these advances come questions regarding privacy, data use, safety, fairness, and accountability.
The duty of boards extends beyond ensuring that a company meets its targets or keeps up with trends. Boards must also support management in making decisions that foster innovation without jeopardising the company. This is where the balance lies: encouraging creative thinking while adhering to the rules and values that protect all stakeholders.
New ideas, products, and systems help companies stay ahead. They enhance services, reduce costs, and meet the evolving needs of customers. In recent years, digital tools have enabled businesses to serve people in faster, more personalised ways. For example, financial technology has made banking easier and more accessible. Health tech has assisted doctors in reaching patients in remote areas. In agriculture, smart devices enable farmers to manage their crops more effectively.
Such changes often happen faster than rules can keep up. While this speed helps businesses grow, it can also lead to decisions that ignore risks or ethical concerns. For boards, this means being alert and ready to guide the company wisely.
Compliance is no longer just about ticking boxes. It means acting within the laws and also meeting the expectations of the public, investors, staff, and customers. These expectations include data protection, fair treatment, and respect for local and international rules.
For instance, the Nigeria Data Protection Act 2023 (NDPA 2023) has raised awareness about how personal data should be handled. Boards of companies that collect data through digital platforms must now ensure that their operations meet this law. Failure to do so could lead to penalties or loss of public trust.
Similarly, companies offering financial or health services must keep up with the rules of their sectors. Innovation must not be an excuse to skip checks that ensure safety or fairness.
Boards must create a work environment where staff can suggest and try new ideas. While doing so, they should also ask questions such as: How will this idea benefit our users? What risks does it bring? Are there rules we must meet? Have similar ideas worked elsewhere?
Such questions will help management stay focused on what matters while still thinking creatively. The aim is to find smart ideas that are useful and safe.
A company’s values must guide its choices, especially when it adopts new tools. For example, AI can help firms make faster decisions, but it can also produce unfair results if not handled properly. Boards must make sure there are checks to avoid bias or harm.
Ethics also apply to how staff are treated during tech shifts. If automation leads to job cuts, how does the company support those affected? Are there new roles or training schemes available? Boards must not allow innovation to cause harm without a plan to reduce its effects.
To guide tech decisions well, boards must understand what these tools do and how they work. This does not mean that every director must be a tech expert. But they should know enough to ask the right questions. Regular workshops or briefings can help.
Some boards also bring in directors with tech backgrounds as stipulated by their sectoral code of corporate governance. These individuals can help others understand new tools better and make well-informed choices. However, all board members should take an active role in learning – tech matters should not be left to one or two experts alone.
Innovation brings rewards but also risks. As principle 17 of the Nigeria Code of Corporate Governance 2018 (NCCG 2018) stipulates, Boards must check that the company has ways to reduce the chances of failure or loss. This includes clear policies, risk registers, and strong internal checks.
For example, if a company plans to use facial recognition tools, the board must ask about privacy risks, data storage, and the chances of misuse. If the risks are too high, the idea might need to be dropped or changed.
Being careful does not mean blocking all change. It simply means making sure that the company does not run into avoidable trouble.
Good boards do not work in silence. They speak with shareholders, regulators, staff, and customers. These groups can help boards understand what people want and expect.
For instance, young consumers often want brands that care about privacy and fairness. Boards must make sure their company speaks clearly about how it uses data or new tech.
At the same time, boards must stay close to regulators. This helps the company understand any changes in the law early enough to act.
Innovation is not just about building new apps or using fancy tools. It is about solving problems in better ways. But companies must not forget the rules and values that hold society together. Boards must lead the way in keeping this balance.
When Boards ask tough questions, support learning, and keep ethics close, they can guide their companies to try new things while still protecting the people they serve. In this age of tech-driven change, such a balance is helpful and needed.
The most trusted companies are not always the fastest or flashiest, but those that think carefully, act wisely, and build lasting value.
Research & Advocacy Department,
Chartered Institute of Directors (CIoD)
28, Olawale Edun Road (Formerly Cameron Road), Ikoyi, Lagos.