By: Creating Future Us

July 28, 2020

To a greater degree than any other sector, technology companies are facing rising forces propelling them towards a more fragmented future – a trend we highlighted in our New Year’s letter. Can Digital Age governance deliver innovative solutions to address these forces, with positive cost-benefit outcomes?

The days when technology companies were homogeneous, global players are rapidly disappearing and three key vectors are driving this splintering:

As the drivers above begin to intersect with commercial considerations, such as market density and profitability, companies will need to explore an ever-wider range of solutions and structures to address these multiple stakeholder needs. An optimal cost-benefit outcome is likely to involve a combination of local solutions that take on various forms, such as ringfencing, partnerships and M&A.

Organisations will therefore need to develop innovative Digital Age governance structures, ones that can effectively and cleanly allocate independence, control, data governance and revenues to the boards of those splintered subsidiaries, while continuing to address the concentration of power concerns from anti-trust regulators. We also anticipate an increased use or creation of “neutral jurisdictions” (a ‘Switzerland’ of legal and governance regulation, so to speak), where companies can establish new geo-strategic bases that appease some of the geopolitical concerns.

At Creating Future Us, we continually monitor the new complex landscape of the Digital Age, gathering insights about its impacts on the Environment, Society and Governance.  We are poised and ready to help organisations grappling with these issues, and to develop the Digital Age Governance models that can help them succeed. Are you seeing any such trends arise? What are your experiences of structures that are working in this emerging world? On these questions and more, we would be delighted to hear from you to add to our growing toolkit, or provide insights and advice.