Companies need at least two IT literate people on the Board these days, the managing director of EDS in Australia, Chris Mitchell, has argued.

Board members can no longer afford to be IT illiterate as companies face the challenge of untangling complicated "legacy" systems, Mitchell said. Speaking at an American Chamber of Commerce function, he said boards need to recognise the benefit in "renovating" unproductive IT systems.

"Boards have to have the ability to understand technology these days," he added. "They need at least one or two technologically literate people on the board so they can understand the implication of these decisions."

One of the biggest challenges facing the business community today, he said, is to unravel what he called the "IT hairball" - the tangle of computer systems that had been tacked together as technology had progressed. These unwieldy computer systems had made businesses inflexible and increased the costs of development projects. "Most companies now are spending 80 percent of their IT budget just on keeping the lights on," he said.

As a result only about three percent of most IT budgets were spent on innovation and new strategies. Mitchell said untangling the hairball would require commitment and investment from businesses and government and would take about five years to achieve.

The demand for more IT-literate people to be on a Board is a far cry from the situation only a few years ago when it was deemed a success for the head of IT to get onto the Board. Now with CTOs a common feature in many companies, it may soon be the case that a lack of IT knowledge will be held against people that want to join the Board.