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Corporate boards are getting more involved in tech investment decisions

May 6, 2022, 11:54 AM UTC

With the expansion of remote and hybrid work, companies are doubling down on software that allows for collaboration and task management, and boosts employee engagement and retention across geographies. Boards are increasingly weighing in on this decision, too.

A recent Gartner survey found that boards at 53% of companies are among the main decision-makers for emerging technology investments, alongside chief information officers and chief technology officers. Surveyed companies invested most heavily in 5G technology last year, with an average spend of $465,000.

The Modern Board spoke to senior leaders at Slack, Meta, Okta, and Gusto to discuss the evolution of workplace technology.

Use cases

Hybrid work is driving changes to tech offerings, says Christine Trodella, head of Workplace at Meta. Starbucks and Walmart are using the Meta Workplace platform to connect their immense frontline workforces with company leadership and staffers at their headquarters.

“We’re continuing to focus on what our customers and internal employees need the most because of hybrid work,” she tells Fortune. “That often ties back to flexibility. This can relate to location, working hours and the platforms we conduct meetings on.”

Other clients are using the platform for employee recognition and rewards. As another example, Trodella points to a veterinary services company that is using Workplace to improve its deliveries, allowing veterinarians, “who often work in lonely, siloed environments,” to access a suite of central resources and dial specialists into their video appointments. She adds that new capabilities that are growing in popularity include AR/VR for training, and auto-translate features in chat or video for globally distributed teams.

Collaboration tools on the rise

Of the ten fastest growing workplace apps in 2021, five were collaboration tools, according to an Okta report: Notion, Figma, Miro, Airtable, and monday.com.

Okta CEO Todd McKinnon says these collaboration tools are the second wave of workplace tech. The first wave, which includes email, messaging, and file storage apps, focused on message and information sharing between employees, rather than real-time collaboration on documents and deliverables.

“These tools are getting better,” McKinnon explains. “They’re more useful and connected to more things.” He notes that between one-third and one-half of Microsoft 365 companies still use Slack or Zoom, and even at the enterprise cloud level, companies are using multiple providers.

This is a symptom of the current environment, McKinnon says. Companies understand that they have to work in a different way, and are willing to try various platforms. “You see a lot of mixing and matching going on,” he says.

Technology to support culture 

Every element of the employee lifecycle, from recruiting and onboarding to performance management and training, has moved online over the last two years. At Gusto, a software provider for medium and small businesses, client adoption of HR tools went up 15x in the first year of the pandemic, says Eric Schuchman, GM and head of product.“Technology is an incredible equalizer.”

Small and medium-sized businesses can attract, hire, and retain employees using technological capabilities that are similar to those of their larger peers, a significant change from years past when most smaller companies used minimal software and manual processes.

Tech is also playing a role in strengthening company culture, with organizations increasingly using software such as Lattice and CultureAmp, the the fourth and fifth most popular HR tools overall last year, according to Okta. Lattice saw 76% year-over-year growth while CultureAmp grew 56%.

“A lot of things in a face-to-face world happened organically,” Schuchman says. “You have to be much more intentional in a remote environment.”

Brian Elliott, executive leader of Future Forum, a research consortium funded by Slack, emphasizes the importance of psychological safety in driving innovation, especially for distributed teams.

In a recent Future Forum survey, he says, employees who reported that their companies had invested in new collaborative technologies since the onset of the pandemic “were twice as likely to say their teams were just as, or even more, creative working remotely versus in an office.”

Aman Kidwai
aman.kidwai@fortune.com

Headlines

Intuit penalized. The company that owns TurboTax is has been ordered to pay $141 million to 4.4 million customers for misleadingly advertising free tax filing services that were, in fact, not free. The investigation from New York Attorney General Letitia James was sparked by a ProPublica report, which found that low-income users were being steered away from the federally-supported free services. “This agreement should serve as a reminder to companies large and small that engaging in these deceptive marketing ploys is illegal,” James said. AP

TikTok pays creators. The fast-growing social video platform will soon share 50% of ad revenue with creators. Users with more than 100,000 followers are eligible for the program, which will run ads across “the top 4% of all videos on TikTok.” The company reported over 1 billion global active users last September, and data from Statista shows that just over 5% of users have more than 100,000 followers. This means around 50 million people will be eligible for the revenue-sharing program, making the creator career path a stronger alternative to traditional employment. The Verge

Worker productivity drops. The first quarter of 2022 saw the largest decline in worker productivity since 1947, according to a Bureau of Labor Statistics report released Thursday. At the same time, labor costs increased 11.6%, the largest quarterly increase since 1982. These figures highlight the effects of inflation and talent volatility on the labor force. Fed chairman Jerome Powell said he still sees the U.S. in a strong position, but said curbing inflation is needed to continue post-pandemic economic recovery. CNBC

Musk & Twitter. The latest on Elon Musk’s takeover bid of Twitter includes a $1 billion investment from Larry Ellison, cofounder and CTO of Oracle, as part of a $7 billion raise that includes a Saudi prince, the Binance bitcoin exchange, Fidelity Investments, and venture capital firm Andreessen Horowitz. This cash will cut the amount Musk needs to borrow against his Tesla stock in half and reduce his personal investment. Musk will also temporarily be CEO of the company after the takeover goes through, CNBC reports. WSJ

BOARD MOVEMENT

Online sports retailer Fanatics has added SoftBank executive Lydia Jett and former Airbnb CMO Jonathan Mildenhall to its board of directors. NPR has elected Catherine Levene, former president of the national media group at Meredith Corporation, as a public director. Steven Laub, former president and CEO of Atmel Corporation, is joining the board of Rambus, a computer chip and silicon IP provider. IBM chairman and CEO Arvind Krishna was elected a Class B director of the Federal Reserve Bank of New York. Medical technology company Stryker has named Sherilyn McCoy to be its new lead independent director. Sylvie Veilleux, former CIO at Dropbox, is joining the board of QScale, an eco-responsible computer center company. SaaS platform SumoLogic appointed former healthcare executive and entrepreneur John Harkey to its board. Mark Ernst, managing partner at Bellevue Capital and former COO at Fiserv and H&R Block, and Diego Rodriguez, former chief product and design officer at Intuit, are joining the board of Lending Tree.

Numbers That Matter

14%

The percentage of new Fortune 500 board appointments in 2021 who were sustainability experts was 14%, more than double 6% the year prior, according to the Heidrick & Struggles 2022 U.S. Board Monitor. The share of CFOs among new board appointments dropped from 21% in 2020 to 14% last year. CEO representation also decreased significantly. About 40% of new appointees were current or former CEOs, down from a high of 60% in 2018.

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