By Janhavi Dadarkar, Programme Lead for IoD's flagship governance courses and Stuart Coleman, Learning and Business Development Director, Open Data Institute (ODI).
Decision making at board level can easily be skewed by poor or no data and directors of all organisations have to be wary of ‘lies, damned lies and statistics’. But in a world where organisations have been forced to move most interactions and activities online; the pace at which data is being generated has grown exponentially; and sources of data are harder to trace; the challenge of how directors can ensure the quality and appropriate level of data analysis to ensure better decision-making is only increasing. This compounded with the issue that most organisations collect but do not really use their data effectively means that directors more than ever, need to understand how the organisation’s data management efforts can affect and influence their organisation’s reputation and future success.
As Abubakar Suleiman, CEO, Sterling Bank, put it in one of the Open Data Institute’s Inside Business podcast episodes, “we need to accept that data is no longer the language of the future, it’s the language of now.”
Too often, in the boardroom, data governance tends to take the back seat as senior leaders are not always sufficiently cognisant of what is required. There is either too much reliance on these matters being dealt with at an operational level and too little time scrutinising the data quality, or operational paralysis by need to protect or over analyse data.
Eye-watering penalties for data scandals have rightly led organisations to consider the risks associated with data collection and usage but with the unintended consequence that some organisations have become so risk averse, that they forget that data is an intangible asset that has great value if used properly. On the other hand, some organisations fail to align their data usage and processing with their stated values, purpose and strategy.
At the Institute of Directors (IoD) where entrepreneurial directors of small and medium enterprises as well as multi-national and listed companies are encouraged to connect, develop and influence better business practices, the key message is that directors have to set the tone at the top. To do this in relation to data governance, directors must be upskilled in data literacy.
What does data literacy really mean?
“Data literacy is the ability to think critically about data in different contexts and examine the impact of different approaches when collecting, using and sharing data and information.” Jeni Tennison and Dave Tarrant (Open Data Institute)
It’s not so much about how to manipulate the data but rather how to critique data collection, use and sharing, and present it in business terms. A lot of people still pigeonhole data as a technical discipline when really it is a business asset. When treated as an asset and supported by robust governance principles, data has the potential to unlock significant value for organisations.
Senior leaders might have a broad understanding of its value to achieve their organisation’s strategic goals but that understanding needs to include other elements e.g. compliance and risks. In other words, what are organisations doing with data that could be a source of liability? What significant risks are not being measured? In industries like finance for example, it’s become common practice to regulate how companies report on their accounts to make sure organisations are not being dishonest. Such reporting requires some level of data literacy.
Experts need to demystify data and make it more accessible to senior leaders and the workforce in general. The fastest way to bring people up to speed is to hire talented professionals within the boardroom that have a deep understanding of data.
Data literacy is as important as data skills within an organisation. As Tim Berners-Lee, inventor of the World Wide Web and co-founder of the Open Data Institute, commented, “We need to train both the people who are putting data and information out there, as well as those reading it, how to interpret and question it to ensure they understand it and are not being misled or deceived.”
Within organisations, data literacy is not always at the top of the agenda. There is very little understanding around the opportunities that technology involving huge amounts of data presents.
Why is data literacy critical for an organisation’s success
Data literacy is a key component of data strategy – businesses with formal data literacy plans are in the top 20% performing companies by return on sales (source - Open Data Institute). The more organisations understand data, the more they can align and drive their business strategy better.
Training on data informs the decisions that matter to an organisation’s growth. Every leader at boardroom level needs to be aware of data and AI and the value they can generate. It’s beneficial for many people in the organisation if the board understands data. The benefits of having broader board experience when it comes to data can help drive an organisation’s business strategy as a whole.
How to get started with data literacy?
Organisations need to determine the type of data approach, data management practices and technical capabilities they need but also view data as ‘the business’ rather than merely an IT matter. Customised training for directors is one way to help with this cultural shift. The IoD has created a joint data governance learning programme with the Open Data Institute to help directors get to grips with data and provide useful guidance that can help organisations at every step of their data journey.
The quicker boards can come to grips with the need to invest in talent to grow data literacy within the boardroom, the better. As with any technical area, this is not about becoming experts but educating directors so that they have the confidence to ask the right questions and request the right information to enable better decision making for sustainable growth that benefits the business, as well as society.
About the Open Data Institute
The ODI was co-founded in 2012 by the inventor of the web Sir Tim Berners-Lee and artificial intelligence expert Sir Nigel Shadbolt to show the value of data, and to advocate for the innovative use of data to affect positive change across the globe.
We’re an independent, non-profit, non-partisan company headquartered in London, with an international reach. We work with companies and governments to build an open, trustworthy data ecosystem, where people can make better decisions using data and manage any harmful impacts.