How Can Supervisory Boards Influence Strategic IT Directions?

IT systems are no longer merely supportive tools for organizations; they increasingly form an essential part of organizational strategy. In her PhD research, Dr. Simone van Golden MSC MBA demonstrates how supervisory board members with digital expertise can influence an organization’s digital strategy.

"In the past, IT systems were primarily developed to speed up existing processes. Today, digital technologies—including AI—are transforming organizations and are deployed as core components of business strategy,” Van Golden explains. “At the same time, decision-making on major IT projects can flip 180 degrees when there are personnel changes at the management or executive level, with all the consequences that follow. This made me curious about the involvement of supervisory boards in digital topics, and the impact that having—or lacking—digital expertise might have.”

Leveraging Digital Opportunities

Van Golden notes that large Dutch companies typically use a two-tier board structure, also known as a dualistic governance model. “This means there is a clear separation between the executive board and the non-executive (supervisory) board. I’m interested in the dynamics this creates, especially when it comes to an organization’s digital strategy and transformation. With my research, I hope to contribute to improving supervision of digital strategy so that organizations can seize digital opportunities.”

Research in Hospitals

Van Golden conducted a literature review across the fields of corporate governance, strategic management, and board-level IT governance. This was followed by two empirical studies in Dutch hospitals. She chose this sector because digital transformation is essential for the future sustainability of healthcare. “In a case study, I compared the supervisory boards of four Dutch hospitals with varying levels of digital expertise. Afterwards, I conducted nineteen in-depth interviews with non-executive and executive board members from Dutch hospitals, asking them, for example, about the concrete actions taken by their non-executive board members.”

Intrinsic Motivation

Van Golden’s research draws on stewardship theory, which assumes that stewards are intrinsically motivated to act in the long-term best interests of the organization. Supervisory board members who take a stewardship approach use their expertise to influence others and collectively achieve the best organizational outcomes. Stewardship theory stands in contrast to agency theory, which focuses more on non-executive boards controlling the executive board.

Digital Expertise Leads to More Action

Supervisory board members are often expected to ask critical and probing questions, something also reflected in the academic literature. But they can also take concrete actions—actions that, according to Van Golden’s research, are context-dependent. Her study shows that non-executive board members specifically appointed for their digital expertise intensify their supervision of digital strategy.

Using a stewardship perspective, their actions can be grouped into three categories. The first includes actions that enhance the supervisory board’s own knowledge. The second consists of actions that empower others, such as executives and managers. The third includes actions through which supervisory board members directly influence digital strategy and board-level IT governance.

“Examples include motivating and inspiring executives, placing IT topics on the agenda, sharing knowledge, or developing checklists. Digital expertise within a supervisory board can therefore lead to greater prioritization of digital issues at the board level and increase the supervisory board’s influence on digital strategy.”

Challenges and Further Research

Because the number of seats on a supervisory board is limited, and because supervision of digital strategy is context-dependent, organizations must carefully consider what kind of digital expertise is required at the board level. Van Golden’s findings can support organizations during this discussion. “In addition, the research provides deep scientific insights into the supervision of digital strategy and the role of digital expertise. This opens avenues for further research in other sectors and with different research methods. In doing so, we can continue to refine our understanding of how non-executive board members supervise digital strategy and identify which types of digital expertise are valuable in which situations.”