Enabling Good Corporate Governance

Of late there has been an ever-increasing emphasis on the need to have good
corporate governance in the business world. And, almost all the corporate
regulatory bodies, both in India and overseas have been over stressing to
introduce mechanisms which will force the business houses to commit to better
corporate governance, specially post-Enron debacle and other similar chaotic
financial goof-ups.

Good corporate governance has, seemingly, always meant "providing
continued value addition to its shareholders and stakeholders while maintaining
the integrity, openness, transparency and accountability in its corporate
conduct (including statutory financial practices, reporting and audit) and
business activities". And, achieving it is always dependent on the right
decisions taken at the right time by the right people within the enterprise
which, in turn, is based on the availability of the timely information to the
these people, in the manner and at a place as may be deemed most appropriate and
convenient.

For any business to prosper as per the expectations of its stakeholders, it
is imperative that its business objectives and business strategies are realized
as per plans. And, among others, few of the crucial objectives of any successful
business are-how to reach its service offerings/products to the target audience
fastest? How to keep the cost of the product/services offerings optimum and
affordable by the customer? How to maintain the right quality of these products
and services within the given constraints of time and budget, and above all the
other two most important–how to remain profitable at all times by maintaining
the healthy bottomline and at the same time how to continue creating its own
"brand" which is for the keeps?

Now to meet these objectives, one would surely need a mechanism and a system
which will enable the timely flow of data, the facts and figures and the related
information to and for the concerned people in the enterprise who are
responsible for it so that they can act on it appropriately. Be it–collecting
the timely feedback from the market on the company’s products/services, its
quality and price, procuring the raw material in time from the suppliers,
gathering information about the raw material’s price and quality, ensuring
that production plans are realized within the company, funds flow information
(incoming and outgoing), all this requires a well-maintained and adequately
monitored IT infrastructure and environment which will enable the timely
delivery of these details most effectively and efficiently to the concerned
people within the organization.

And, the chances are that the said flow will not be as smooth as expected or
the break-in-flow is bound to occur sooner or later in any organizational
environment. The answer to avoiding this undesirable "break" and,
thereby, not been able to achieve the company’s business objectives lies in IT
Governance which could, alternately, be also termed as "i-Governance".

"i-Governance" (ie IT Governance), essentially, means governing the
IT environment within the organization with due diligence and through well
defined procedures and processes that is guiding, managing and monitoring the IT
infrastructure, IT’s objectives, IT’s performance, IT resources and IT
risks. Once IT environment is governed adequately enough by following the
principles of IT-Governance, smooth and open flow of information is bound to
take place within the enterprise in an objective manner making the entire
organization transparent, accountable and person-independent at all levels.

Pawan Jain The author is president
& CEO, ISG Software