Corporate Governance in the Context of Business Digital Transformation

Аннотация

This article examines the transformation of OPEN ACCESS traditional corporate governance mechanisms amid SUBMITED 24 March 2025 ACCEPTED 26 April 2025 the accelerated adoption of digital technologies, PUBLISHED 27 May 2025 where the pace of innovation and the escalation of IT- VOLUME Vol.07 Issue 05 2025 related risks demand from Boards of Directors not only CITATION monitoring but also active strategic engagement in Aleksandr Voronkov digital initiatives. The relevance of this study is driven COPYRIGHT by the fact that global spending on digital © 2025 Original content from this work may be used under the terms transformation reaches trillions of dollars. In contrast, of the creative commons attributes 4.0 License. only a small fraction of companies manage to adapt the structure of their governing bodies: standing IT committees exist in only 15% of S&P 500 organizations, and “digital-savvy” directors number no more than 24%. Meanwhile, firms with high Board digital competence demonstrate market-capitalization growth rates 30% higher and exhibit superior equity returns. This research aims to identify key institutional and procedural changes necessary to align corporate governance with the requirements of business digital maturity. The novelty of this work lies in the comprehensive assessment of the Board composition, specialized committees, and technological and ESG metrics integration on strategic decision effectiveness, and in formulating practical recommendations for revising mandates, business processes, and training programs at the highest management level. Conclusions drawn from this study point to the fact that sustainable growth in the digital era would demand: (1) increasing to three or more Board members having IT and cybersecurity competencies; (2) establishing empowering standing Science and Technology Committees; (3) providing continuous education including “digital onboarding” for new Board members; (4) creating a single digital KPI dashboard accessible to all; and (5) embedding new The American Journal of Management and Economics Innovations 90 https://www.theamericanjournals.com/index.php/tajmei procedures into charter documents under EU AI Act However, institutional changes have not kept pace with Data Act NIS 2 requirements. The DBS Bank case shows technological challenges: only 15% of S&P 500 that the mix of these measures led to a threefold companies have a standing Science and Technology increase in share price and a fivefold rise in profits over Committee, and merely 24% are “digitally competent” ten years. This piece will be helpful for Board members, (i.e., have three or more directors with IT experience) corporate secretaries, corporate governance [3]. Meanwhile, research [4] shows that such digital- consultants, and digital transformation strategists. savvy Boards deliver approximately 30% higher market- capitalization growth rates than companies whose Keywords: corporate governance, digital Boards lack digital expertise. transformation, Board of Directors, digital-savvy board, technology committee, digital maturity, ESG metrics, AI A critical issue is the tight linkage between IT and Act. corporate strategies. Despite 91% of global companies launching digital initiatives, 91% of directors are Introduction: Digital transformation represents a concerned about their cost, and only 44% are confident sustained organizational shift in which companies move in management’s ability to implement the new business from using information technologies merely to model. This gap indicates that many Boards still view the automate fragments of processes toward fundamentally digital agenda as an auxiliary rather than a strategic rethinking the entire value-creation chain and customer driver, which slows the reorientation of investment experience. The IDC forecast confirms the scale of this portfolios and top-management KPI systems [5, 6]. phenomenon: global spending on digital transformation will grow to nearly 4 trillion USD by 2027 [1]. Thus, the core problem is asynchrony: the pace of technological innovation and pressure from customers, The progression of companies up the “digital maturity regulators, and competitors grows exponentially, while ladder” typically begins with data digitization, then corporate governance processes update only with involves process digitalization, and finally leads to inertia. The lack of digital skills on Boards, fragmented business-model transformation. A firm converts analog responsibility for IT risks, and a focus on short-term documents and channels at the first level but retains its financial results impede firms’ transition from “digital previous operational logic. At the second level, it projects” to a sustainable digital business model. restructures processes around real-time data and Bridging this gap requires revising Board composition algorithms. At the third level, it moves to platform and mandates, instituting continuous director ecosystems where value