How technology enhances governance compliance.

• Author: Knighton, Michael
• Position: GOVERNANCE IT

Consider how it used to be: being a financial executive, responsible for complying with the ever-changing rules and regulations you deal with related to corporate governance, but without today's modern information technology (IT) tools. Besides the increased amount of time spent gathering and analyzing the data you'd accumulate from disparate departments, business units, etc., you'd then have to communicate the information to appropriate sources. In addition to the time you'd spend, the accuracy of the data would likely be questionable.

Fast-forward to the 21st century, where a variety of IT tools have been developed with the capability of managing a full array of domestic issues for a corporate governance program. As such, companies are speeding up efforts to manage their ever-changing information in the most efficient ways possible.

Technology allows professionals from many areas (board of directors, CEO, finance, tax, etc.) to access everything-from descriptions of the latest rules and regulations to how a company documents and complies with those regulations. Indeed, technology relieves many of the challenges governance requirements impose on corporations and enables swift compliance across the enterprise.

Before describing the widely-used types of technology, it's important to acknowledge current trends in corporate governance. People, processes and technology all influence the organization, and corporate leaders must keep their eye on the current situation to know how to best design their individual governance capabilities.

Corporate governance scandals of the early 2000s opened a Pandora's box, sparking continuous efforts to drive regulations, which, in turn, increased expectations of boards of directors, audit committees and senior management. Common concerns include the 2002 Sarbanes-Oxley Act's internal controls over financial reporting, executive compensation and disclosure, majority voting for directors, succession planning and independence of boards.

Directors need to be clear on the means or processes that will best achieve their policies to ensure compliance, and they need to make those policies clear as a baseline practice. If boards want to proactively excel (and not just comply), the challenge becomes "how?" How do they operationalize those requirements in a complex environment with multiple mandates, conflicting requirements, limited resources, disparate committees and limited opportunity for collaboration and discussion?

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