Key issues: IT governance

More companies are gaining competitive advantage by leveraging information technology for their benefit. Tablets, mobile computing and social media tools are all playing more direct roles in distinguishing a company's offerings and enhancing its performance. With these advances, come associated risks, and board members increasingly recognize that they may need to actively oversee such risks.

There are certain situations where the board may want to consider getting involved in IT oversight. For example, where:

• The company has a strategic program to capitalize on emerging technologies such as mobile networking, cloud computing, or social media.
• IT is an integral part of how the company serves customers.
• The company stores highly confidential information about customers or stakeholders.
• The company has multinational operations with disparate systems or is integrating the systems of an acquired enterprise into its own technology platform.
• The company is entering into a major technology implementation project with a long installation period and significant costs.

In such circumstances, directors may want to spend time in the boardroom discussing the company's technology program and the emerging technologies the company plans to use, either through their audit or risk committees or as a full board. Often, boards or committees don't have IT expertise, so they may consider using an outside consultant.

It is also important for directors to be aware of the increased instances of cyber attacks and to discuss with management the associated risks and how the company classifies and protects sensitive customer information.

PwC perspective “History has proven that a company's ability to manage and leverage new technologies can provide distinct business advantage or maintain its competitiveness. With emerging technologies such as the cloud, mobile computing devices and social media, directors need to consider if a company can get caught from behind by its competitors who more successfully embrace emerging trends.” — Don Keller, Partner, Center for Board Governance

Learn what PwC has to say about IT Governance:

• PwC's To the point - Spring 2011: IT risks -- a director's perspective
• PwC's Technology Forecast: Transforming collaboration with social tools

Additional information about IT Governance:

• NACD Directorship: The Upside of IT Is Innovation
• NACD BoardVision: IT Risk Oversight
• NACD BoardVision: Cyber Security