Interfacing Is Governance with Corporate Governance

a. Interfacing IS governance with corporate governance What is corporate governance? When discussing corporate governance, Cadbury (1999) states that, “Corporate governance is concerned with holding the balance between economic and social goals and between individual and communal goals…the aim is to align as nearly as possible the interests of individuals, corporations and society”. Various literature is available on the subject, one such is the King report 2002 on corporate governance which has institutionalized corporate governance in South Africa.

Corporate governance as stated by the King committee on corporate governance (2002) suggests several characteristics embodying this type of governance. These characteristics are outlined below: ? Discipline – The commitment made by top management towards adhering to behavior and practices that are universally recognized and accepted to be correct and proper. ?Transparency – Outsiders must be able to draw conclusion/analysis with ease of all the companies operations. This encapsulates all activities related to the economics and other non-economical attributes of the company.

The company must be able to provide relevant information, as and when is required. Transparency is required for investors to make informed decisions. ?Independence – This outlines the extent to which mechanisms have been put to control, minimize and avoid conflicts of interests which may occur. All business decisions, such as board appointments must not allow for undue influence, and preserve independence. ?Accountability – Decision makers within the business, must be held accountable for their decisions. Correct measures must be in place, which may be utilized by investors i. . for assessment purposes. ?Responsibility – Mechanisms must be in place, to address incorrect behavior, such as mismanagement. Senior management must be guided by mechanisms to act appropriately should such arise. Management must act responsibly to ensure that the business doesn’t derail, in good faith and in the best interests of the company, and its shareholders. ?Fairness – All systems/mechanisms existing within the company must be balanced and fair. This may amount to equal treatment between minority and majority shareholders. Social Responsibility – Companies must be aware of social issues, and must priorities ethics. Companies must consider the environmental factors, as well as the human rights issues, and identify them as priority. Responding to these factors will indirectly benefit the company, such as an increased corporate reputation. The King committee on corporate governance (2002), continues to state that corporate governance, is about leadership. This is identified in the need for efficiency, probity, responsibility, transparency and accountability.

The latter is of utmost importance, as without it, business leaders cannot be trusted which will result in the decline of the company. What is Information System (IS) Governance? IS governance as stated by KPMG (2008), is not a one size fits all approach. There are multiple factors which must be considered and impact on implementation, such as regulations, corporate culture etc of the organization. In understanding the context, the external factors such as industry regulations amongst others, need to be looked at, so as to locate the company’s overall IS strategy.

IS governance seeks much to do with the generally accepted practices and is manifested within the Control Objectives for Information and Related Technology (CoBiT), IT Infrastructure Library (ITIL) and ISO 27001 amongst others. These governance strategies and frameworks are all geared towards promoting a quality approach to achieving business effectiveness and efficiency through the use of information systems. The link between Corporate Governance and Information Systems Governance Corporate governance has been outlined above, as the responsibility of the Board of Directors of a company.

IS governance is thus an integral part of that corporate governance, as it is used as a mechanism to value and monitor performance and control risk, this too is the responsibility of the Board of Directors. Accountability and responsibility were defined as key components of corporate governance and forms the basis of IS governance. The objective is to align IT with the organizations business strategy, thus all mechanisms must work together in ensuring that this objective is realized. b. Sustainable IS leadership; What it means to be sustainable

Hargreaves and Fink (2000) suggest that sustainability has migrated past it being whether something can last. Sustainability is thus coined as how particular initiatives can be developed and improved upon, without destroying the integrity of other initiatives in the immediate environment in the short-long term. Fullan (2003) states that to be sustainable, organizations must be able to robustly engage the complexities of continuous improvement consistent to the deep values of human purpose. It is thus not surprising having reached this conclusion, that sustainable leadership must be innovative and last.

The core underlying attribute of sustainable leadership is thus, a shared responsibility, as stated by Hargreaves and Fink (2003). The responsibility aspect speaks towards ethics, the cultivation of a, conducive environment that cares and does not exert damage to the immediate environment. Sustainable leadership has thus been linked to several characteristics as stated by Hargreaves (n. d) being: ?Sustainable leadership creates and preserves sustaining learning. ?Sustainable leadership secures success over time. ?Sustainable leadership sustains the leadership of others. Sustainable leadership addresses issues of social justice. ?Sustainable leadership develops rather than depletes human and material resources. ?Sustainable leadership develops environmental diversity and capacity. ?Sustainable leadership undertakes activist engagement with the environment. The Application Applying Sustainable leadership to the IS perspective, we note that the IS managers would need to adopt a holistic approach of doing things. They will need to be able to distribute leadership in their unit effectively, in a bid to broaden and deepen the pool of leadership talent.

Succession planning features dominantly in sustainable leadership, and replaces charismatic leadership with an inspirational one. Ethical responsibility is important, as IS leadership must acknowledge and consolidate all active factors (internal/external). Sustainable IS leadership must continually seek to achieve cohesive diversity, and move away from bureaucratic processes of standardization, policy etc. It is an assumption thus sustainable IS leadership, dwells on the capability of management to effectively plan IS projects.

The systems introduced through this type of leadership must reflect the aspect of sustainability. c. Corporate politics in and around the IS function; What is Corporate Politics? Tierstein (2007) defines corporate politics as “competition between interest groups or individuals for power and leadership” another related definition stated by Tierstein (2007) is the “total complex of relations between people in society”. From an application point of view, corporate politics talks about how individuals from within the organization are in a position to influence the policy positions of the company.

In the Information Technology context, it boils down to preferences and whose preferences will win the day. This may be presented through the financial aspect, where it would have to be discussed which IT projects must be funded, and to which extent and level they should be funded. The politics will be manifested in the competition that will exist between the stakeholders, (functional units and project teams etc. ) where the direction must be determined. Tierstein (2007) resolves to say that everything is essentially political, when it comes to human interactions, more so within a corporate setting.

Corporate politics in and around the IS function The factors that are present in the corporate setting are as stated by Tierstein (2007): ?Personality tests – As a participant in the corporate politics cycle, in order for one to interact well with co-workers, there is a need to first be aware of oneself. These personality tests come in the form of aptitude tests ? Dealing with other people – The important aspect, to this, is that the lines of communication must be open at all times. Corporate culture – Open door policies foster the open flow of information through to subordinates. It should be noted that corporate culture must not be misunderstood as the corporate mission. Corporate culture as an internal aspect of corporate politics, is located deep within the philosophies of the organization, or better yet the way an organization does things. Organizations should however ensure that their corporate culture is in sync with the overall corporate strategy, should they fail to align such, corporate culture, may serve as an obstacle of progress. ?Power relations Formal power – As part of politics, which essentially has to do with power, formal power, is usually institutionalized and recognized by the organization. oInformal power – This type, is earned and not institutionally given by the organization. This may be evident in being a specialist in your field of study. Other traits, may result as being identified as a team leader, and encapsulates the power to have influence over a direction. ?Management – They may contribute to the corporate politics through taking some decisions such as: oUsing consultants – Together with the employees may present itself as a problem.

Employees may view the consultants, as having the same skill which they posses, and may have a view, that the consultants are being paid more in terms of remuneration. oDecision making – Managers are faced with tough decisions, which they need to take. Such decisions have an impact on the external setting, for example, which company is awarded a contract. d. The relationship between the CIO and the CEO; Who is the CEO? The Chief Executive Officer is the highest ranking executive manager in an organization. The CEO is furthermore tasked with the responsibility pertaining to the success of the entire organization.

Heathfield (2011) continues to state that, the CEO’s responsibilities include creating, planning and integrating the strategic direction of the organization. Who is the CIO? The Chief Information Officer is identified as the person who is responsible for Information Technology within an organization. The CIO is often viewed as responsible for formulating the strategic goals of an organization. He generally participates in ensuring that there is a continuous flow of information throughout the organization, through implementing support systems. The relationship between the CEO and CIO

Although the two functions can be easily confused as being one in the same, there are distinct differences and attributes which guide their relationship. Southgate (2002), states that the relationship between the two is improving, where the IT division is growing and occupying a central role, in decision making processes. The business (CEO) aligned IT (CIO) strategy brings such into existence. Although there are factors which exist, which seek to undermine this relation, such as poor communication, such is not a major problem, and can be easily addressed.

CEO’s are recognizing the importance of IT in an organization, and with that, strengthens the bond. The CEO must continually liaise with the CIO, so as to ensure that the CIO is at par with the strategy the organization intends following, so as to better mitigate the way forward. In some instances particularly in small IT organizations, the CIO performs the same duties as that of the CEO. This relation highlights the importance and similarity of both officers, and how closely related and complimentary they are to each other. e.

The power and influence of management versus leadership What is leadership? According to the Center for Leadership Studies (2004), leadership is said to be a collection of various traits and characteristics, which inspires the realization of a vision and systematically develop means and strategies to reach those goals. Establishing a common direction forms the basis of leadership, where the leader must convince/influence his subordinates to follow the strategy. The leader must communicate his vision translated into strategy so that his workforce willingly accepts the agenda.

Leadership as stated by the Center for Leadership Studies (2004), highlights the importance of motivating the workforce, and inspiring them to overcome challenges that they may be faced with. Correctly motivating and managing the workforce, will result in positive results, which is the attainment of goals. The traits that are associated with leadership are numerous and include amongst others a strong drive for responsibility, a focus on completing the task and the ability to influence the behavior of others. Leadership is associated with top management focused on the strategic direction of the business. What is Management?

The Center for Leadership Studies (2004) outlines a clear distinction between Leadership and Management. The activities of a manager usually include the execution of top management strategies, developed by the leadership of the organization. These are in the form of creating long, short and medium term plans, and allocation of budgets and resources. Management is responsible for handling the day-to-day activities such as organizing, staffing, development of policies and monitoring. The monitoring aspect is to ensure that processes are being executed as planned, and deviations are accounted for and corrected.

The Center for Leadership Studies (2004) states that the functions or key traits Management must possess includes amongst others the ability to take decisions. The comparison The power and influence relations between management and leadership are clear and distinct. Leadership in essence informs management in terms of both influence and power. Management through hierarchical placement is denoted as Middle management. This does not have the capacity to chart strategic direction or an organization, and only converts strategic plans drafted by the leadership of the organization into practical and achievable medium to short terms plans.

Leadership occurs at the strategic top level of the organization, denoted by the shareholders/Board of Directors. f. Organizational IT portfolio in relation to government’s IT infrastructure. Government IT infrastructure According to the IDC Governments Insight (2011), governments are increasingly optimizing their technology budgets, to ensure that there is a set level of standardization in accordance with the technology to be implemented. The overall objective of this is to ensure that operational costs are drastically reduced, and to realize a return of IT investment.

The government IT infrastructure is there for a particular reason, which is to increase the value of the government in the eyes of the citizens through improved service delivery. The IDC Governments Insight (2011) thus moves to suggest that to realize improved service delivery, the integration of systems, and processes need to occur to improve point of contact services, such as interoperability, operational effectiveness and the actual utilization of technology as a means to measure effectiveness.

Having said that, government must continuously maintain and informed business view of the technology infrastructure. The IT portfolio Kumar et al. (2009), state that the IT investments makes up the bulk of the organizational spend of organization. IT managers are thus under continued pressure to justify this investment and in essence demonstrate the value IT brings into the business. The IT unit must continually select the best projects that would fit the corporate strategy, which will in essence, maximize the business value of the organization.

The IT portfolios of an organization are all the technological assets of a company. These will be constituted through the IT infrastructure assets, which are the hardware and software, IT human resources etc. Kumar et al. (2009), suggest that the IT management/portfolio, must be the same as the manner in which financial portfolio is managed, and should strive to improve the performance of a portfolio by balancing risk and return. The relation There is a dire need to implement IT portfolio management practices on government IT infrastructure.

When this is done, the IT infrastructure can be correctly leveraged to derive usefulness towards its immediate stakeholders. When IT portfolio management is implemented, IT infrastructure can be viewed as an asset, and measured in line with the countries developmental goals. g. Critical success factors for a CIO. Chun and Mooney (2007) state that there are about nine (9) characteristics which IS managers/CIO’s need to posses in order to perform their duties successfully. Figure 1 below graphically illustrates these characteristics all centralized around the responsibility aspect.

A brief description is as follow: ?Leadership – According to the Figure 1, leadership spans across the “Business systems thinking”, and should allow for integration of IS into the business activities. This generally speaks towards a business aligned IT strategy. ?Relationship building – The CIO must be empowered to liaise with other functional leaders, towards improved usage of IT within the business. ?Architecture planning – In line with technical considerations, the CIO, must be able to plan for current and future strategic plans, and consolidating such on a technical platform. Making technology work – This must coincide with architecture planning, where the progress must be monitored. ?Informed buying – The CIO must be able to facilitate purchasing duties within his scope of work; to meet his business needs efficiently. Outsourcing considerations would have to be encapsulated within this scope. ?Contract facilitation – The CIO, must be able to implement monitoring mechanisms within the IT unit. ?Vendor development – The CIO must identify and assess service providers, in accordance with procurement practices. Figure 1

Source: Chun and Mooney (2007, pg324) It is thus having mentioned these characteristics, that the CIO must be honest, be a good communicator, and have excellent interpersonal skills. The CIO must be able to motivate his subordinates towards achieving functional strategies, and should have knowledge of the business perspective of the company. Further attributes which may be deemed favorable, as stated by Feeny et al. (n. d), the CIO must a change-orientated team player furthermore being a catalyst to business thinking. h. Career development for IS leadership

Information system managers, need to continuously hone their skills and improve on their qualifications, in order to remain relevant, in this dynamic field of work. Applegate and Elam (1992), state that ideal candidates for IS positions, are usually individuals who possess a multitude of skills such as business, technology and leadership. There are various complexities linked to finding the right person, such as persons from within the IS function, may not have the business knowledge required, and that an external candidate might not the organizational knowledge required.

Having said that, the IS manager must have an impressive track-record with a solid reputation, must have established relationships with persons in the industry and should lastly have excellent interpersonal skills and integrity. There are but a few requirements needed such as networking as stated by Applegate and Elam (1992) where IS managers, must foster an aggressive agenda, for change, and secure and maintain a large network of resources to carry out their activities.

IS mangers must broaden their skills and experiences across field, be it in business operations and strategy. Career development programs are also key towards building IS leadership in order to gain valuable perspectives. The failure of doing such, will seek to undermine the effectiveness of the IS manger, his potential as well as the career potential of people who report to them. References ?Cadbury, A. 1999. Corporate Governance Overview, World Bank Report ? Heathfield, S. M. 2011 http://humanresources. about. om/od/glossaryc/g/ceo_title. htm ? Southgate, D, 2002. CEO-CIO relationships improving but nowhere near perfect ? IDC Governments Insight (2011), United States Government IT Infrastructure Strategies http://www. idc-gi. com/getdoc. jsp? containerId=IDC_P15372 ? Feeny, D. F, Edwards B. R, Simpson, M. K 1992. Understanding the CEO/CIO Relationship ? Chun, M. Mooney, J 2007. CIO roles and responsibilities: Twenty-five years of evolution and change ? KPMG, 2011. IT Advisory, IS governance services ?KING COMMITTEE ON CORPORATE GOVERNANCE. 2002

December 3, 2017