CIO Straight Talk - Issue 7 - 72

72

We're all aware that Information

reports issued in 1994 and 2002)

technology is central to a company's

and known as King III, described

success. No longer merely an enabler

the changing role that IT plays in

of business, IT is integral to

business. E-commerce, electronic

corporate strategy - especially

communication, the automation

as most enterprises become

of many operational tasks - these

digital enterprises.

and many other developments had

Given this, it shouldn't come as a

made businesses heavily reliant on

surprise - though it undoubtedly will

information systems while creating

to some - that here in South Africa

new kinds of risks. And whereas

the IT function is today the most

information systems once were

audited component of the business.

business enablers, they now were

Just as publicly traded companies

central to business strategy. This

are required to audit their financial

"pervasiveness of IT in business today

accounts, the boards of companies

mandates the governance of

listed on the Johannesburg Stock

IT as a corporate imperative," the

Exchange are required to monitor

report said.

and assess IT's performance in areas

Corporate boards were charged

ranging from network security to

with overseeing a number of specific

capital investments.

areas of IT responsibility and

This means that CIOs must justify

following a set of principles when

their activity and performance to the

making decisions about IT. This

board. But board members, although

put a heavy new burden on board

they increasingly understand the

members. The world of technology

crucial role that IT plays in corporate

is a fast-moving environment. It's

success and failure, usually aren't

difficult for even the most tech-

very IT savvy, compared to their

minded of us to stay abreast of it all,

financial acumen.

and most board members are not well

So I have devised a tool to help
boards understand where IT is

versed in technology.
I wanted some way to help boards

meeting strategic expectations and

fulfill their responsibility. The result

where it isn't. Such a tool, tailored

was a balanced scorecard that the

to a particular company's situation

board could review at every one

or business environment, may prove

of their quarterly meetings. The

useful to CIOs in other countries -

balanced scorecard, which originated

even though they might not face the

as a performance measurement

scrutiny from regulators that IT does

framework that added strategic

in South Africa.

non-financial performance measure

A New Burden for Boards

to traditional financial metrics,
has become a widely used tool for
providing a concise snapshot of how

The third report of the King

certain activities are furthering an

Committee on Corporate Governance,

organization's strategic agenda.

issued in 2009 (following earlier

CIO Straight Talk | 34

With a scorecard devised

South Africa's
IT Governance
Principles
The following principles are laid
out in Chapter 5 of "King III,"
the third installment of the King
Report on Corporate Governance,
which was issued in 2009 and
applies to all companies listed
on the Johannesburg
Stock Exchange:
5.1 The board should be
responsible for information
technology (IT) governance
5.2 IT should be aligned with
the performance and
sustainability objectives of
the company
5.3 The board should delegate
to management the
responsibility for the
implementation of an IT
governance framework
5.4 The board should monitor
and evaluate significant IT
investments and expenditure
5.5 IT should form an integral
part of the company's
risk management
5.6 The board should ensure
that information assets are
managed effectively
5.7 A risk committee and audit
committee should assist
the board in carrying out
its IT responsibilities
CIO Straight Talk - Issue 7

Table of Contents for the Digital Edition of CIO Straight Talk - Issue 7
