Governance Helps Avoid Data Disconnect

Who should be responsible for data governance? Data duties have traditionally fallen to IT, but the business is held accountable for problems arising from poor data quality, says Ian Rowlands, senior director of product management at ASG Software Solutions.  Ann recently interviewed Rowlands:

All: Why is data governance so important?
Rowlands: There are three main drivers: one highly tactical, one highly strategic and one kind of in between. The tactical one is data quality. I am starting to chant a little mantra: “Data dictates decisions.” If you have bad data, you make bad decisions. That can be hugely significant, of course. That’s a pointer to the fact that data governance is a framework that can encompass a wide variety of different projects.

The second big driver is compliance. We’re seeing things like Basel II, which was a driver for the project we did with HSBC. (Editor’s note: ASG and its client HSBC were named co-winners of The Data Warehousing Institute’s Best Practice Award in the category of Data Governance. HSBC uses ASG-Rochade, a metadata repository that is implemented in 10 of the world’s 20 largest banks and at other companies worldwide as an enabling technology that manages information about data and systems across the enterprise.) But compliance is now almost everywhere you turn. Every industry has its own multi-initial nightmare, HIPA in the health care space, etc. If you sign for data knowing it hasn’t been adequately derived, you can wind up in a nice, orange suit. That to me fits between the tactical and strategic.

The very strategic driver is all about business agility. Very often data governance encompasses data integration and business transformation initiatives. Clearly if you have multiple instances of effectively the same information or you have people creating their own variants of the same information, it becomes very difficult to make business changes as rapidly as you’d like. A telecommunications company we worked with had difficulty changing rate plans because they had to rush around and change so much information before they could actually change the plan.

All: Is data governance getting a higher profile now that organizations are interested in using their data to do things like analyze customer behavior patterns?
Rowlands: That’s where you get to a really interesting phenomenon. There are a whole bunch of disciplinary and technical trends which play into the notion of data governance. At the disciplinary end, there are things like master data management, there are functional capabilities like CRM, which is kind of a subset of master data management. All of those drive toward a governance notion.

Then there is the shift of power from the IT organization to the business organization, particularly the interest in business glossaries and other semantic-related concerns. That gets to be interesting. We work with a health care organization, for instance, which is having great debates about what “length of stay” means for their organization. Is it the amount of time a patient spends in a bed or the amount of time the insurance company is prepared to pay? In the end, it’s a governance question.

At the technical end is the whole SOA phenomenon. We have organizations that are moving rapidly from the idea of SOA as a functional repartitioning approach to using SOA as a way of encapsulating and exposing data objects for reuse in a wide variety of contexts. That obviously isn’t going to happen unless there’s an effective data governance approach in place.

All: You touched on the problem of different data definitions. What are some other data governance challenges?
Rowland: There is data quality, of course. That’s a technical issue, as are data definitions. But there are some straightforward, big picture challenges as well. The biggest one is all about who should own the processes. It’s a cultural thing more than anything else. Traditionally IT has owned the data, but the accountability is increasingly with the business. It’s generally the CFO who will get arrested if the data that is signed off on proves to have been constructed using a process that has caused the data to be inaccurate or unreliable.

Related to that is the whole question of who has to do the work and who gets value out of doing the work. A data governance activity can impose a significant burden on the people who are responsible for defining the business entities, defining the relationship between the business entities and the technical entities, managing the business rules that control how information may be accessed and transformed. The benefit very often does not fall on the people who have had to do the work.

Now these things aren’t strictly about data governance. They are more about information quality and the management of information in general. Governance per se is the framework, policies and organization for making hard decisions when disagreements arise. But it generally devolves into the practical kinds of activities. It all goes to this discussion of is IT supporting the business or is the business providing appropriate resources to IT.

All: Has there been a tendency to separate data management and data governance?
Rowlands: That’s a really interesting question. I don’t think there has been a tendency to keep them separate. But data management has been around for a good, long time while data governance is really an emerging practice. Sometimes (governance) comes out of the data management world, and sometimes it’s been imposed top-down by the business.

All: So should data governance be under the purview of business or IT?
Rowlands: My gut feeling is that there are a couple major considerations that need to be taken into account. Is information a key part of the organization’s value chain, or is it a supporting resource? If it’s a key part of the value chain, I think governance migrates toward the business more than toward the IT function. And the other issue is how tightly regulated is the enterprise? Again, I suspect the more tightly regulated an enterprise is, the more likely it is to have a senior business player as the sponsor or the executive owner of the governance program.

All: It would seem that you’d want business and the IT to work closely together on data governance. Is that not happening today?
Rowland: Of course that’s right. And now you’re kind of beating ASG’s drum. Our core message is that it’s been very difficult for business and IT functions to work together because they speak different languages. One of the things that ASG is striving to do with our Business Service Platform and our metadata initiative is to act as a translator, if you like.

All: So having business and IT work closely together is a best practice. Are there any others we should mention?
Rowlands: I believe data governance initiatives without executive sponsorship are doomed to fail. After a while, the business will say, “Why are we spending money on that?” and they won’t see the benefit.

All: I believe ASG recently integrated its software with a configuration management database. What are the advantages of this approach?
Rowlands: Organizations spend a lot of money on designing data and applications and business processes. They describe all of that, and hopefully they document it fairly well and they have a metadata repository at the heart of the documentation. And then you go toward practically implementing things, applications running on servers and databases on other servers, and so on and so forth. One of the critical governance questions is, “OK, is what I’ve deployed and am running in the real world the same as what I designed?”

The configuration management database discovers things that are actually deployed. If you use the same fundamental technology for your configuration management database and your enterprise metadata repository, then you have this really cool way of putting things side-by-side and saying, “Oh, that’s not really what we designed.” And because it’s not, you know you have a challenge which needs to be exposed to the governance process. Do you need to go back and correct your design because you’ve updated something, or do you have something in production which needs to be remediated?

All: Obviously, the earlier you can identify problems like this, the better?
Rowlands: Yes, there’s some research in the application development world that says if you think about the stages - design, develop, test, put into production - as you get into each stage there’s a factor of ten increase in the cost of discovering something is out of whack. I think this is an equivalent thing - maybe even more costs – in the data world. One of the nasty things about data problems is that sometimes they don’t actually reveal themselves for quite a long time. And that can be horribly expensive.

All: So what is the key takeaway about data governance?
Rowlands: Let me put data governance in a bigger framework. The way I see the management of information technology and the business is that there are multiple parallel formalizations going on. There is a formalization of IT service management and business management processes. There is a formalization of data governance. There is an emerging formalization of enterprise architecture. All of those things really play together.

There is a kind of critical success factor, which is having a consolidated information platform that all of those things are based on. Organizations may do great work at standardizing all of their processes. But if they do it in silos, they end up with a disconnect between the various pieces and they find themselves having to go around and do rework. The underlying information base is going to be the critical key to IT and business success. And that’s where data governance gets framed. It’s part of making sure that the information base is consistent.

Corporate Governance: Indian Perspective Vis-a-vis International Perspective




Corporate governance: Indian perspective vis-à-vis international perspective.

The word ‘corporate governance’ has become a buzzword these days because of two factors. The first is that after the collapse of the Soviet Union and the end of the cold war in 1990, it has become the conventional wisdom all over the world that market dynamics must prevail in economic matters. The concept of government controlling the commanding heights of the economy has been given up. This, in turn, has made the market the most decisive factor in settling economic issues.

This has also coincided with the thrust given to globalisation because of the setting up of the WTO and every member of the WTO trying to bring down the tariff barriers. Globalisation involves the movement of four economic parameters namely, physical capital in terms of plant and machinery, financial capital in terms of money invested in capital markets or in FDI, technology, and labour moving across national borders. The pace of movement of financial capital has become greater because of the pervasive impact of information technology and the world having become a global village.

When investments take place in emerging markets, the investors want to be sure that not only are the capital markets or enterprises with which they are investing, run competently but they also have good corporate governance. Corporate governance represents the value framework, the ethical framework and the moral framework under which business decisions are taken. In other words, when investments take place across national borders, the investors want to be sure that not only is their capital handled effectively and adds to the creation of wealth, but the business decisions are also taken in a manner which is not illegal or involving moral hazard.


Corporate governance therefore calls for three factors:

a) Transparency in decision-making

b) Accountability which follows from transparency because responsibilities could be fixed easily for actions taken or not taken, and

c) The accountability is for the safeguarding the interests of the stakeholders and the investors in the organization.


Implementation of corporate governance has depended upon laying down explicit codes, which enterprises and the organisations are supposed to observe. The Cadbury’s code in United Kingdom was the starting point, which led to a number of other codes. In India itself we have the Kumaramangalam Birla code as a result of the committee headed by him at the behest of the SEBI. Earlier we had the CII coming up with the code for corporate governance recommended by the committee headed by Shri Rahul Bajaj. The codes, however, can only be a guideline. Ultimately effective corporate governance depends upon the commitment of the people in the organisation. The very first issue of corporate governance in India is, do the India managements really believe in corporate governance?

Corporate governance depends upon two factors. The first is the commitment of the management for the principle of integrity and transparency in business operations. The second is the legal and the administrative framework created by the government. If public governance is weak, we cannot have good corporate governance. The dramatic Enron case has highlighted how companies, which were the darlings of the stock market and held up as models for vigorous and innovative growth can ultimately collapse like a house of cards as they were based on fraud and dishonesty. The association of the accounting firm Anderson has also raised a doubt about the credibility of even well regarded global players.

In the Indian context, the need for corporate governance has been highlighted because of the scams we have been having almost as an annual feature ever since we had liberalisation from 1991. We had the Harshad Mehta Scam, Ketan Parikh Scam, UTI Scam, Vanishing Company Scam, Bhansali Scam and so on. I have been suggesting that we should learn from especially the United States to see whether we can replicate similar conditions in our capital market. It is not that the United States is free of scams. Right now the Enron issue is examined by a number of committees at different levels in the United States. At the end of all these examinations, they are likely to come with a better

model. In the Indian corporate scene we must be able to induct global standards so that at least while the scope for scams may still exist, we can reduce the scope to the minimum.


The “revolution” started in the early 1990s with the Cadbury Report on the financial aspects of corporate governance, to which was attached a code of best practice. Aimed at listed companies and looking especially at standards of corporate behaviour and ethics, the “Cadbury Code” was gradually adopted by the City and the Stock Exchange as a benchmark of good boardroom practice. In 1995, the Greenbury Report added a set of principles on the remuneration of executive directors (in response to some particular “fat cat” scandals, notably that involving British Gas chief Cedric Brown, whose 75 per cent rise incensed both unions and small shareholders), and in 1998 the Hampel Report brought the two together and produced the first Combined Code. A year later, the Turnbull Report concentrated on risk management and internal controls.

In each case, the reports were prompted either by shareholder disquiet over perceived shortcomings in corporate structures and their ability to respond to poor performance, or to government threats of legislation if the corporate sector failed to put its house in order.

In 2002 Derek Higgs, an investment banker was given the brief to look again at corporate governance and build on the previous reports to produce a single, comprehensive code. Shortly afterwards, the full consequences of the Enron and WorldCom scandals were realised, leading to new unease. The Higgs Report came out in early 2003, but was greeted with horror by some leading companies, with claims that it placed an unrealistic burden on non-executives and marginalised the role of the chairman. The task of taking Higgs’s draft forward was passed to the Financial Reporting Council (FRC), a body established by government and comprising members from industry, commerce and the professions. The FRC consulted further and produced a revised Code that followed most of Higgs’s recommendations but softened a few of the more contentious points, and so gained general acceptance. With rather less fuss, at the same time Sir Robert Smith, chairman of the Weir Group, was leading a review of the role of audit committees and his recommendations were incorporated into the new Code. The 2003 Code was updated with minor amendments in June 2006, with the new version applying to financial years beginning on or after November 1, 2006.

Report of SEBI committee (India) on Corporate Governance defines corporate governance as the acceptance by management of the inalienable rights of shareholders as the true owners of the corporation and of their own role as trustees on behalf of the shareholders. It is about commitment to values, about ethical business conduct and about making a distinction between personal & corporate funds in the management of a company.” The definition is drawn from the Gandhian principle of trusteeship and the Directive Principles of the Indian Constitution. Corporate Governance is viewed as ethics and a moral duty. On January 1, 2006, India entered a new era of corporate governance as the reforms popularly known as “Clause 49” took full effect.1 A decade in the making—and complicated by Enron and the other corporate scandals of this time period—Clause 49 has brought broad new requirements related to board composition, audit committee activity, information disclosure, and top management certification. The similarities with Sarbanes Oxley and other governance reforms around the globe should be obvious.


Corporate governance and financial regulation in India was generally considered quite poor until the economic reforms of the early 1990s. The Securities and Exchange Board of India (SEBI) was established in 1992 by an act of Parliament, and SEBI was given the job of regulating stock exchanges, brokers, fraudulent trade practices, and other areas of corporate activity.5 As its power grew over the decade, SEBI started to play a much more active role in setting minimum standards for corporate behavior. In addition, a voluntary code of corporate governance was developed by the Confederation of Indian Industry (CII), a group of well-regarded Indian firms.

Near the turn of the century, SEBI commissioned a series of projects to improve Indian corporate governance by building on CII’s code (and by converting the voluntary code into a mandatory one). This work would eventually lead to the Clause 49 reforms. The first SEBI committee, comprised of 17 prominent business leaders and chaired by Kumar Mangalam Birla, advocated a variety of new governance requirements— including a minimum number of independent directors, the creation of audit committees and shareholders’ grievance committees, and additional management disclosures on firm performance.

These recommendations were soon adopted, but, importantly, they were not imposed on every public company through legislation (in contrast with Sarbanes Oxley in the United States). Instead, SEBI implemented the Birla Committee reforms by modifying the listing requirements for firms seeking to go public on an Indian stock exchange. Thus was born Clause 49, a new collection of corporate governance obligations that individual firms would agree to when they signed listing contracts with any stock exchange in the country. As part of a gradual roll-out process, the Birla Committee reforms were not imposed immediately on all public firms. Instead, they were made mandatory in 2001 for the largest Indian companies (and for newly listing firms), and then expanded to smaller public companies over the next few years.

All of this seemed fine until 2002, when fallout from Enron, WorldCom, and other corporate governance catastrophes caused Indian regulators to wonder whether Clause 49 went far enough. SEBI decided to sponsor a second corporate governance committee chaired by Narayana Murthy, the renowned leader of Infosys Technologies. The Murthy Committee went to work and released its additional recommendations in 2003. SEBI quickly adopted these suggestions and issued a revised Clause 49 in 2004.

The Murthy Committee reforms expanded on the Birla Committee’s work in several areas. One main focus related to the qualifications for independent director status: a number of specific requirements were added to disqualify material suppliers and customers, recently departed executives, relatives, and other closely-related parties. A second set of changes affected the audit committee: it was now required to meet more frequently (four times per year), and members had to satisfy new financial literacy requirements. A third important change mandated CEO and CFO certification of financial reports and internal controls. And a number of additional shareholder disclosures, including expanded discussion of financial results, were added to the Clause 49 requirements. As before, these reforms were phased in gradually; all public firms were not required to comply with the Murthy Committee rules until January 1, 2006.

The fruits of this labor were generally well-received, and Clause 49 seems to have improved the overall state of Indian corporate governance. For example, a recent study by Bernard Black and Vikramaditya Khanna argues that stock prices of imminently affected firms jumped almost four percent when SEBI announced its decision to pursue the initial Clause 49 reforms. Similarly, the World Bank as part of its 2005 standards and codes initiative benchmarked India’s regulatory framework to the OECD principles of corporate governance. It announced that India has indeed come a long way over the past decade, reporting that “a series of legal and regulatory reforms have transformed the Indian corporate governance framework and improved the level of responsibility/accountability of insiders, fairness in the treatment of minority shareholders and stakeholders, board practices, and transparency.”

But in this same study, the World Bank also flags four areas of concern. First, many sanctions seem inadequate, and there is a need for stricter enforcement of governance violations in order to increase compliance with Clause 49. Second, the division of regulatory responsibility between SEBI, the Department of Company Affairs (DCA), and the individual stock exchanges needs to be clarified to prevent oversight from slipping between jurisdictional flagstones. Third, board practices need to be strengthened to avoid director “rubber stamping,” especially by establishing credible institutions for training board members on their fiduciary responsibilities.21 And finally, according to the World Bank, institutional investors and large independent shareholders still need to become “important forces to monitor insiders and play a disciplining role in the governance of corporations.”




The ethical temperature of any business or capital market depends on three factors. The first is the individual’s sense of values. The second is the social values accepted by the business and industry. Let us not forget that when Harshad Mehta Scam took place, it was claimed that the manner in which the bank receipts were being treated was the prevailing norm. Perhaps a similar argument would have been given in the Ketan Parikh Scam. In other words, practices which were later on found to be highly objectionable become acceptable because that was the prevailing market practice. Social values will depend upon the standards set up by professional bodies like the Association of Chartered

Accountants or Cost Accounts of India and so on. The third and perhaps the most decisive factor is the system. It is here we face the main challenge. Our system encourages lack of corporate governance. Some of the specific steps that should be taken to improve corporate governance are the following:

a)         The Sick Industries Companies Act (SICA) has become so convenient for the unscrupulous managements that we find in our country industries become sick, the industrialist do not become sick. BIFR has also been called the Bureau of Industrial Funeral Rites! It is high time we scrap the entire system. This will mean the abolition of SICA and organisations like BIFR there under. Mere tinkering with the system by making amendments is not going to improve the situation.

b)         The entire banking system and the Banking Secrecy Act call for a review. Our banking system is such that if you borrow one lakh of rupees, you are afraid of the bank but if you borrow ten crores of rupees, the bank is afraid of you. With the amount of NPA going beyond 58000 crores, it is high time that we amend the Banking Secrecy Act to reveal those who are willful defaulters. The Narasimham Committee’s recommendation about putting this condition at the time of issuing new loans can cover only to some extent the moral hazard. It is high time that practice of disclosing the name of willful defaulters is made more practical and timely. Publishing the names in the case of suits, which have been filed, is of no value at all because by that time the matter is all but over.

c)         Laws like the Benami Transactions Prohibition Act and the Prevention of Money Laundering Act should be implemented effectively and vigorously. Agencies like the CVC can be used to ensure that corrupt practices are effectively punished because it is the atmosphere, which encourages proper corporate behaviour. In India today we have a system where the level of public governance is very poor. There is no fear of punishment at all. In such a situation it is only a saint who will be observing strictly the rules of corporate governance.

Corporate Governance

Corporate governance is the set of processes, customs, policies, laws and institutions affecting the way a corporation is directed, administered or controlled. Corporate governance also includes the relationships among the many stakeholders involved and the goals for which the corporation is governed. The principal stakeholders are the shareholders, management and the board of directors. Other stakeholders include employees, suppliers, customers, banks and other lenders, regulators, the environment and the community at large.

Corporate governance is a multi-faceted subject.[1] An important theme of corporate governance is to ensure the accountability of certain individuals in an organization through mechanisms that try to reduce or eliminate the principal-agent problem. A related but separate thread of discussions focus on the impact of a corporate governance system in economic efficiency, with a strong emphasis on shareholders welfare. There are yet other aspects to the corporate governance subject, such as the stakeholder view and the corporate governance models around the world (see section 9 below).

There has been renewed interest in the corporate governance practices of modern corporations since 2001, particularly due to the high-profile collapses of a number of large U.S. firms such as Enron Corporation and Worldcom. In 2002, the US federal government passed the Sarbanes-Oxley Act, intending to restore public confidence in corporate governance.

In A Board Culture of Corporate Governance business author Gabrielle O’Donovan defines corporate governance as ‘an internal system encompassing policies, processes and people, which serves the needs of shareholders and other stakeholders, by directing and controlling management activities with good business savvy, objectivity and integrity. Sound corporate governance is reliant on external marketplace commitment and legislation, plus a healthy board culture which safeguards policies and processes’.

O’Donovan goes on to say that ‘the perceived quality of a company’s corporate governance can influence its share price as well as the cost of raising capital. Quality is determined by the financial markets, legislation and other external market forces plus the international organisational environment; how policies and processes are implemented and how people are led. External forces are, to a large extent, outside the circle of control of any board. The internal environment is quite a different matter, and offers companies the opportunity to differentiate from competitors through their board culture. To date, too much of corporate governance debate has centred on legislative policy, to deter fraudulent activities and transparency policy which misleads executives to treat the symptoms and not the cause.’[2]

It is a system of structuring, operating and controlling a company with a view to achieve long term strategic goals to satisfy shareholders, creditors, employees, customers and suppliers, and complying with the legal and regulatory requirements, apart from meeting environmental and local community needs.

Report of SEBI committee (India) on Corporate Governance defines corporate governance as the acceptance by management of the inalienable rights of shareholders as the true owners of the corporation and of their own role as trustees on behalf of the shareholders. It is about commitment to values, about ethical business conduct and about making a distinction between personal & corporate funds in the management of a company.” The definition is drawn from the Gandhian principle of trusteeship and the Directive Principles of the Indian Constitution. Corporate Governance is viewed as ethics and a moral duty.

Impact of Corporate Governance

The positive effect of good corporate governance on different stakeholders ultimately is a strengthened economy, and hence good corporate governance is a tool for socio-economic development.[4] After East Asian economies collapsed in the late 20th century, the World Bank’s president warned those countries, that for sustainable development, corporate governance has to be good. Economic health of a nation depends substantially on how sound and ethical businesses are.

Parties to corporate governance

Parties involved in corporate governance include the regulatory body (e.g. the Chief Executive Officer, the board of directors, management and shareholders). Other stakeholders who take part include suppliers, employees, creditors, customers and the community at large.

In corporations, the shareholder delegates decision rights to the manager to act in the principal’s best interests. This separation of ownership from control implies a loss of effective control by shareholders over managerial decisions. Partly as a result of this separation between the two parties, a system of corporate governance controls is implemented to assist in aligning the incentives of managers with those of shareholders. With the significant increase in equity holdings of investors, there has been an opportunity for a reversal of the separation of ownership and control problems because ownership is not so diffuse.

A board of directors often plays a key role in corporate governance. It is their responsibility to endorse the organisation’s strategy, develop directional policy, appoint, supervise and remunerate senior executives and to ensure accountability of the organisation to its owners and authorities.

The Company Secretary, known as a Corporate Secretary in the US and often referred to as a Chartered Secretary if qualified by the Institute of Chartered Secretaries and Administrators (ICSA), is a high ranking professional who is trained to uphold the highest standards of corporate governance, effective operations, compliance and administration.

All parties to corporate governance have an interest, whether direct or indirect, in the effective performance of the organisation. Directors, workers and management receive salaries, benefits and reputation, while shareholders receive capital return. Customers receive goods and services; suppliers receive compensation for their goods or services. In return these individuals provide value in the form of natural, human, social and other forms of capital.

A key factor in an individual’s decision to participate in an organisation e.g. through providing financial capital and trust that they will receive a fair share of the organisational returns. If some parties are receiving more than their fair return then participants may choose to not continue participating leading to organizational collapse.

Internal corporate governance controls

Internal corporate governance controls monitor activities and then take corrective action to accomplish organisational goals. Examples include:

Monitoring by the board of directors: The board of directors, with its legal authority to hire, fire and compensate top management, safeguards invested capital. Regular board meetings allow potential problems to be identified, discussed and avoided. Whilst non-executive directors are thought to be more independent, they may not always result in more effective corporate governance and may not increase performance.[5] Different board structures are optimal for different firms. Moreover, the ability of the board to monitor the firm’s executives is a function of its access to information. Executive directors possess superior knowledge of the decision-making process and therefore evaluate top management on the basis of the quality of its decisions that lead to financial performance outcomes, ex ante. It could be argued, therefore, that executive directors look beyond the financial criteria.

Remuneration: Performance-based remuneration is designed to relate some proportion of salary to individual performance. It may be in the form of cash or non-cash payments such as shares and share options, superannuation or other benefits. Such incentive schemes, however, are reactive in the sense that they provide no mechanism for preventing mistakes or opportunistic behaviour, and can elicit myopic behaviour.

External corporate governance controls

External corporate governance controls encompass the controls external stakeholders exercise over the organisation. Examples include:

demand for and assessment of performance information (especially financial statements)

debt covenants

government regulations

media pressure



managerial labour market

telephone tapping


Codes and guidelines

Corporate governance principles and codes have been developed in different countries and issued from stock exchanges, corporations, institutional investors, or associations (institutes) of directors and managers with the support of governments and international organizations. As a rule, compliance with these governance recommendations is not mandated by law, although the codes linked to stock exchange listing requirements may have a coercive effect.

For example, companies quoted on the London and Toronto Stock Exchanges formally need not follow the recommendations of their respective national codes. However, they must disclose whether they follow the recommendations in those documents and, where not, they should provide explanations concerning divergent practices. Such disclosure requirements exert a significant pressure on listed companies for compliance.

In the United States, companies are primarily regulated by the state in which they incorporate though they are also regulated by the federal government and, if they are public, by their stock exchange. The highest number of companies are incorporated in Delaware, including more than half of the Fortune 500. This is due to Delaware’s generally business-friendly corporate legal environment and the existence of a state court dedicated solely to business issues (Delaware Court of Chancery).

Most states’ corporate law generally follow the American Bar Association’s Model Business Corporation Act. While Delaware does not follow the Act, it still considers its provisions and several prominent Delaware justices, including former Delaware Supreme Court Chief Justice E. Norman Veasey, participate on ABA committees.

Understanding it Governance



Governance is the buzz word these days – you hear of Enterprise Governance, IT Governance, Portfolio Governance, Program Governance, Project Governance, Data Governance, SOA Governance and the list goes on.

What is Governance?
There is no standard universally accepted definition for IT Governance.
We would define governance as a set of protocols, procedures, best practices and guidelines that can be of assistance to make better decisions.

Portfolio Governance, Program Governance, Project Governance, Data Governance, SOA Governance and other IT related frameworks are closely tied with IT Governance and IT Governance is integral part of Enterprise Governance.

IT strategic governance is required to efficiently manage IT investments. IT strategic frameworks like COBIT and ITIL provide guidance to improve accountability and delivery of IT investments (Programs, Projects, Services and Resources).


Strategic Governance has become more critical in the new age of globalization and corporate scandals. We need to consider business IT alignment, new regulatory requirements to support executive management and clearly connect the strategic plans to governance processes.


IT departments need to create a strategic plan that describes the mission, vision, goals, priorities, strategies, measures and technologies covering all aspects of IT Department. IT strategic plan is usually derived from the supporting department’s strategic plans.

Balanced Scorecard:


Developed by Kaplan, a Harvard Business School professor of accounting and Norton, president of Renaissance Solutions, Balanced scorecard is a strategic planning and performance management framework that enables measurement and translation of strategy into financial and non-financial factors.


Balanced scorecard translates the organizations strategy into four perspectives

Financial Performance, Customer Knowledge, Internal Business Processes and Learning & Growth.

What is CobiT:


Control Objectives for Information Technology (CobiT) is a set of standards for guiding management in the sound use of information technology published by Information Systems Audit and Control Association (ISACA) and and the IT Governance Institute (ITGI)


CobiT4.1 has 34 high level processes that cover 210 control objectives categorized in four domains: Planning and Organization, Acquisition and Implementation, Delivery and Support, and Monitoring.


What is ITIL:


ITIL(the IT Infrastructure Library ) is the most widely accepted approach to IT service management in the world.The ‘IT Infrastructure Library’ was originally created by the United Kingdom Government.


ITIL version 3 release has a significant change of framework from the previous emphasis on IT process to a total lifecycle approach (Service Strategy, Service Design, Service Transition, Service Transition and Continual Service Improvement).


Portfolio Governance:


Portfolio Governance defines the processes and procedures for the management of IT Portfolio ( Programs, Projects and Tasks).
Portfolio Management is the key for IT Governance since it covers the planning and management of total IT investments.


Assign PMO irrespective of the type (Centralized PMO, Consulting PMO or Blended PMO) with Portfolio Management would create a IT value governance structure that can reap huge benifits to the organiation.


IT Portfolio usually created from the business strategies will need to be supported by PMO to standardize and govern the programs and projects in the approved portfolio providing a full value governance flow for IT investment.

Program Management Standard / Managing Successful Programs (MSP)

Standard for Program Management is a collection of five process groups and the program life cycle practices published by Project Management Institute(PMI).


Process Groups Are

Initiating Process Group,

Planning Process Group,

Executing Process Group,

Monitoring & Controlling Process Group

Closing Process Group.


Program lifecycle includues the following


Pre Program Setup

Program Setup

Establish Program Managment

Deliver Benifits

Close Program

MSP (Managing Successful Programs) is a framework for program management ublished by the Central Computer and Telecommunications Agency (CCTA) now part of the Office of Government Commerce (OGC). MSP is widely recognised and popular in Europe


MSP Process are


Identify Program

Define Program

Govern Program

Manage Portfolio

Manage Benifits

Close Program


PMBOK – Project Management Body Of Knowledge is a collection of five process groups and nine knowledge areas for effective project management best practices published by Project Management Institute(PMI). PMBOK is widely recognised and popular in North America.


Process Groups are Initiating, Planning, Executing, Monitoring & Controlling and Closing.


Knowledge Areas Are:

Project Integration Management

Project Scope Management

Project Time Management

Project Cost Management

Project Quality Management

Project Human Resource Management

Project Communications Management

Project Risk Management

Project Procurement Management


PRINCE2 (Projects IN Controlled Environment) is a process-based method with eight processes and four phases for effective project management developed by the Central Computer and Telecommunications Agency (CCTA) now part of the Office of Government Commerce (OGC). PRINCE2 is widely recognized and popular in Europe


Process Groups Are


Starting up a project

Initiating a project

Controlling a stage

Managing product delivery

Managing stage boundaries

Closing a project

Process Phases Are: Starting a project, Initiating a project,  Implementing a project, and Closing a project.

Please refer to the other articles from to understand IT governance and advance your career by appropriate governance certifications.