By Derek Smith Jr
Changing economic conditions, access to a global market, evolution of information technology and an increased demand for enhanced corporate governance are all contributing factors to the growth of the board’s role in governance. I had the opportunity to discuss governance with the Institute of Internal Auditors Bahamas Chapter last week. I welcomed the conversation as internal auditors are crucial to governance because they provide objective assurance and insight on the success and efficiency of risk management, internal control and governance processes.
Locally and for clarity, according to the Insurance Commission of the Bahamas (ICB) Guidance Note for Corporate Governance Oversight Assessment Criteria: “Corporate governance and oversight refers to board and management functions, processes, structures and information used for directing and overseeing the operations of an institution.” Additionally, the Central Bank of The Bahamas (CBOB) Guideline for the Corporate Governance of Banks and Trust Companies Licenced to Do Business From and Within The Bahamas notes that corporate governance is related to the interaction of an organization’s board, management, shareholders and other stakeholders, including its employees and customers. Globally, according to the Cadbury Committee (1992), which is noted as the first UK governance code: “Corporate governance is the management system which directs and controls companies.”
On the other hand, the role of governance is to ensure consistent management, cohesive policies, guidance, processes and decision rights for a given area of responsibility in order to meet and/or exceed a company’s desired goals.
Considering October is Cybersecurity Awareness Month, I wish to highlight the importance of data governance and information security governance.
Data governance
The purpose of data governance is to manage data to optimize business outcomes and drive business development. Arguably, outside of human capital, data is the most important asset of a company. Business decisions are based on data. Data management and protection involves people, processes and technologies. A well-designed data governance program is critical to ensuring data maximization. The framework is considered a hub and must at minimum include a data architecture, data modelling and design, data storage and operations, data quality, metadata, data warehousing and business intelligence and data security.
Information technology (IT) governance
It’s a triple-pillared approach of structure, participation and process. The structure speaks to the mode of operation selected for implementation. Participation involves the mechanisms implemented to engage all parties and ensure transparency in the decision-making process. The use of a myriad of IT standards and frameworks to best facilitate effective governance and controls around IT governance is the process.
Conclusion
In short, as organizations address the growing array of risks created by new technology, cybersecurity, regulatory and disruptive innovation, being agile while compliant with corporate governance and oversight requirements is key to capitalizing on opportunities.
Derek Smith Jr is a governance, risk and compliance professional of more than 20 years with a record of leadership, innovation and mentorship. His career has been fortified by holding strategic positions at a TerraLex member law firm, a Wolfsburg Group member bank and a Big 4 accounting firm. Smith is a certified anti-money laundering specialist (CAMS) and the compliance officer and MLRO for CG Atlantic’s family of companies (member of Coralisle Group Ltd) for The Bahamas and Turks and Caicos.
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