As we move into the future, rapid changes are taking place in technological development. Due to their as yet unknown nature, these changes may have the ability to impact the future performance, profitability, data confidentiality, or continuity of a business.
Despite the pace of technological growth, many organisational boards have not attached any special significance to the subject of IT governance until recently. Some board members do not have the knowledge required to understand how important information technology is to shape their companies’ strategies and are unable to thoroughly investigate technological risks and their impact on the business.
With the increasing influence of IT on an organisation’s functions, IT governance is necessary to get appropriate corporate governance – prompting the establishment of IT governance standards and charters. Having a sustainable structure for decision-making and effective control is vital. An IT governance charter is the ideal solution to help with distributing responsibilities among committees, guiding decision-making processes, encouraging shared accountability, and countering the risks involved with IT management.
The composition, components, key points, and critical focus of a charter are based on an organisation’s unique and specific needs. A standard charter across all areas will include the following:
The purpose of a charter is to supply guidance and an oversight for the use, management, and integrity of information, supporting the organisation’s mission, vision, goals, and objectives. Additionally, it serves to provide value, reduce and minimise risk, and comply with regulations and legal standards. Roles and responsibilities must be allocated that define the purpose of each IT governance committee.
Information technology requires effective governance and planning as it is a significant investment in the organisation. The charter describes the related structures, processes, functions, accountability, roles and responsibilities, delegations, reporting responsibilities, and how IT governance will be implemented. Efficient IT governance ensures optimal beneficial results and clear goals, and expectations are set in IT management and operations. As a result, risks are reduced.
Scope and responsibilities
The charter must provide clear guidance on the IT governance committee’s responsibilities, subcommittees, and all appointed persons related to the governance of IT in the organisation.
Examples of responsibilities
- Develop sound IT governance policies
- Align IT services and investments with the corporate strategy
- Balance investment risk against potential investment opportunities
- Assess and improve the effectiveness of IT in the governance process, while monitoring its success and impact
- Review and approve IT governance-related strategies and roadmaps
- Prioritise IT governance-related scope, priorities, and initiatives
Membership and reporting structure
The charter includes a statement of who must participate, manage and oversee IT governance, to ensure that information and resources are available to achieve the charter’s purpose.
Examples of participants
- Board of directors
- Audit committee
- Risk committee
- Executive management structures
- IT management committees
- IT investment structures
- Information and IT security governance structures
- Administrative structures
The committee responsible for feedback needs to report to the board with meeting minutes, written reports, and significant matters and findings related to IT governance and management. Charters are implemented through systematic (i.e. quarterly) reporting to the board, audit, and risk committees. Reporting helps monitor IT risks and the effective control of IT and information – with IT governance being managed daily. Systematic reporting to the relevant committees includes the need of business units for specific strategic, technical, operational, and information risks. This includes updates on governance framework implementation, access governance, and vulnerability management. Policies, procedures and charters are reviewed to adapt to new legislation and comply with regulations.
The above is a basic explanation and layout of an IT charter; however, it would need to be dedicated and aligned to company-specific environments, structures, operations, goals, incentives, opportunities, and risks to be successful.
At Okina Company Secretarial services, we can help you set up a professional, strategic, and detailed IT charter to ensure the efficient and effective control of IT governance in your organisation. Contact us at firstname.lastname@example.org.