Since the dawn of civilization, governance already existed as a public entity, and this entity was able to thrive within the context of an economic system. The company has employees from all works of life, and they all strive hard to work harmoniously. Each and every employee plays an important role in the overall success of the company. The critical means of getting a return to the security of investment and ownership increased the dealing ways of concentrating on focusing on the prominent topic in the public eye which is corporate governance.
The usual problem that investors are facing is that they fail to take necessary actions to monitor the market trends, latest fashion and market stocks and strategy to inform the public with regard to the status and position of business in the market industry. The single major challenge being addressed by corporate governance is the proper allocation of the power to the managers, shareholders, and stakeholders that principally influence in holding the accountability in business corporations. Yet, corporations cannot be run by consensus, and the delegated substantial powers are assets that have been mismanaged which in turn resulted to bewilderment. Thus, the companies that run worldwide or even in their respective localities hired the necessary device to provide the accessibility in overseeing the management of the company. This illustrates the dynamism of Information Technology.
With the rapid development of technology the strength and indeed the survival of any business corporations depends on upholding the balance between two distinct forces: (a) the appropriate application of Information Technology in running the operation of management heading to the clients and, (b) the superb creation of opportunities for managers and shareholders for the effective and efficient response to conundrum of enterprise. That is to succeed over rival companies in a win-win strategy. Information technology over the years of its existence has defined standards for the implementation of the management system, considerations for the people, process, data, and facilities of the public organization. It gives constructive standard system prescribing the cohesiveness and mutually independence of any organizational framework. The corporate governance system in any country is based on the availability and dissemination of information that can support the accuracy, transparency.
The development of corporate governance is based on certain factors from the environment and internal aspects of the corporation. These developments contributed to the effectiveness of corporate governance and success of the company. One driving influence on its development is the gains and benefits that IT might bring and it’s wider use in different parts of the society.
Information Technology has had a major impact on the way business is conducted: IT advances and the reliance on the computer driven environment had significant implications on corporate governance and the system of internal control. Moreover, IT governance should be part of corporate governance wherein a successful enterprise must integrate IT and business strategies, culture, and ethics in order to attain business objectives and capitalize on technologies present. The injection of new methods and strategies that use Information Technology can, therefore, provide more opportunities and success for a corporation. This approach can be categorized under the best practices approach wherein the management tries to deliver business objectives with the current methods at hand and which had proved to be best for many companies nowadays. IT can be aligned with business strategies wherein the enterprise can maximize benefits, capitalize opportunities and gain the competitive advantage as a whole.
IT Structures in Corporate Governance
Basically, the implementation of Information Technology within corporate governance is on the improvement of methods and tools for daily operations. The most advanced technology provides faster ways and higher opportunities to compete within the industry. The IT structures include ICT tools, security measures, and Information handling. Thus, the proper management of these IT tools and its coherence with corporate governance of the business is an important aspect of this article.
ICT tools. These are Information Communication Tools which are used in different operational business such as communications through the internet, the intranet of the company, database management and installation of software for certain operations. Examples of specific tools include instruction sheets of the management to the employees, improve supervisory check notes which are online based and software that provides the matrix of the trend within the business that the management may easily use when they need the proper information. The use of ICT can help firms gain market share at a lesser cost and may raise productivity, it helps in expanding their product ranges, customize services offer and respond to better client demands. This improves corporate governance through using these tools in better monitoring the performance of employees, faster responses to problems in different problems and strategically utilizes IT in decision makings within the corporation.
Security Measures. One important aspect of any organization is a proper security within its premises and assets. The proper implementation of security measures reflects how the management effectively governs their business. Security using Information technology involves the usage of modern security tools and methods and having a business continuity and recovery plan within the management. Modern security tools include passwords to access the database, a computerized login and log out when entering the company premises and a concrete plan when IT system fails. This provides awareness and preparedness for the whole organization in times of its need. Information handling is also an important IT structure for corporate governance. The use of databases wherein information is easily retrieved and stored speeds up the operations of the company.
The management can use the information from databases in handling certain problems present within a company and create solutions from these data. Information is an important asset in every business and proper governance is needed to protect it.
Information Technology Impacts Corporate Governance
The implication of Information Technology within corporate governance can be seen on technical methods and facilities of a company. However, there are also impacts on other aspects of the corporation such as organizational structure, policies within the corporations, and strategic approach to a business which are dealt by corporate governance. The influence of IT within these aspects contributes on how management can better implement corporate governance within it.
Organizational Structure – Organizational structure plays an important role in governance wherein the reporting structure can provide important means for keeping executive management informed and for keeping organizational elements accountable for information security practices. The implication of a new technology within corporation involves the delegation of new positions to ensure that information technology management is performed properly. Added departments and employees are needed that will be decided by the board of directors. The reporting on the performance of using the IT structures and ensuring that these IT tools are properly used will be the responsibility of the new department. As such, this can better ensure proper governance within the corporation.
Policies within the Organization – With the change in the organizational structure, changes in policies are inevitable. These policies present within the company should adhere to present situation for better-governing structure of the management.
Strategic Approach of the Business – In the application of Information Technology, it usually involves the operations, marketing, customer care, deals with suppliers, stakeholders, workers improvement and other aspects of the organization. With this, the corporate governance will need to shift their strategic approaches. The new approaches can be made in accordance with the present tools and methods used by the company in its operations. One example is by the oil companies. Let us say that the use of technology enables the oil companies to shift their strategy on the improvement of the tools and methods and good relationship with suppliers rather than marketing strategies or an increase of market share.
The shift in a strategy of the management was based on the benefits that IT can provide and more opportunities seen on using IT. Thus, using the influence of IT in companies is providing a more competitive approach basing upon on the decision of the governing body of the corporation.
The use of Information Technology generally provides more benefits wherein businesses were improved and profits were raised. However, one drawback of using Information technology is the increase in competition within the market.
Small companies can now operate like large companies as long as they can use technology properly. One example is the usage of internet by the small companies wherein they can broaden their prospect market without spending too much on advertisements on televisions and billboards. Another is that software for database and other forms of organizing internal operations are easy to purchase in the market that helps the company to form their own IT infrastructure. With this sense, the large corporations should be more aggressive by using their advantages such as their resources and their capability to handle their market to be competitive enough. Thus, the companies should know how to use the right technology and align them with the business objectives and goals of the company as a whole.