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