Three Essays on IT Leadership

Abstract

Information Technology (IT) has become an integral part of modern business, and effective IT leadership plays an important role in ensuring the successful implementation and management of technology, as well as driving sustained business growth. This thesis focuses on IT leadership in the boardroom and at the executive level, highlighting the importance of their roles in influencing an organization’s IT outcomes. The thesis comprises three essays that examine critical aspects of IT leadership: board-level IT expertise, Chief Information Officer (CIO) social capital, and CIO gender.

The first essay, “Tech-Savvy Directors on the Board”, examines whether and how corporate boards, particularly the presence of directors with IT expertise (“tech-savvy directors”), impact a firm’s IT investments and IT capability. Using an instrumental variable approach, we find that tech-savvy directors on the board leads to a substantial 150% increase in IT investments, raising allocation from 1.6% to 4% of firm revenue. Moreover, these directors enhance a firm’s IT capability, as evidenced by a 34% higher likelihood of inclusion in the InformationWeek 500 listing. We examine three mechanisms for the effects grounded in different theoretical perspectives: empowerment (managerial power theory), attention (attention-based view), and learning (resource dependence theory). Our results support the attention effect as the primary driver, suggesting that tech-savvy directors exert their influence by redirecting managerial attention towards IT-related issues.

The second essay, “CIO External Connections”, investigates the impact of CIO social capital on a firm’s internal control over IT. We find that CIOs with more external connections, particularly with board members in other firms, are associated with a lower likelihood of experiencing IT-related material weaknesses (ITMWs) in their firms. Interestingly, CIO connections within the firm, either with the top management team (TMT) or with directors, do not have the same beneficial effect. Further analysis reveals that the primary mechanism through which CIO external connections help reduce ITMWs is by providing the firm with valuable knowledge about these weaknesses. Specifically, our findings suggest that firms learn from the failures of others, allowing them to avoid similar pitfalls. However, we do not find evidence that firms learn from others’ successes in preventing ITMWs.

The third study, “Female CIOs”, investigates how the gender of CIOs influences their firms’ IT internal control effectiveness. Our findings reveal two key insights. First, firms with female CIOs are less likely to experience ITMWs, suggesting that female CIOs may be more effective at preventing such weaknesses. Second, in cases where ITMWs do occur, firms with female CIOs tend to remediate these issues more swiftly compared to their male counterparts. Further analysis reveals that the effect of female CIOs is likely due to their strategic efforts to prove competence and the advantages brought by diverse professional experiences.

This thesis makes several contributions to the existing literature on IT governance and its practical applications. First, this thesis contributes to the literature by addressing a notable gap in our understanding of how boards influence IT governance. Our findings highlight the strategic value of recruiting directors with IT expertise to the board to make informed decisions about technological investments and develop a higher IT capability within the firm. This thesis also suggests an attention-based view as a novel theoretical lens through which researchers can understand the role of the board in corporate governance. Second, this thesis also contributes to our understanding of IT governance at the executive level by examining the impact of CIO social capital and gender on IT internal control effectiveness, a crucial component of overall IT governance. Moving beyond the traditional focus on IT expertise and knowledge, this thesis illuminates the potential impact of the CIO’s social capital and gender on a firm’s ability to establish and maintain effective internal control. The findings in this thesis provide suggestions for firms seeking to strengthen their IT internal control practices.

Date of Award	29 Apr 2025
Original language	English
Awarding Institution	City University of Hong Kong
Supervisor	Ben LIU (Supervisor)