Sharing the Wealth: Why Boards Should be Using Continuous Controls Monitoring
Posted on June 27th, 2008 by Julie Garland McLellan »Permalink
During a recent talk recently with some colleagues, we ended up in a lively discussion on how information technology is considered by – and presented to – corporate boards.
One of the key issues we discussed is the gap between the real-time, active reports on internal operations enabled by continuous controls monitoring and the static reports that are inevitably shown to corporate boards. Even at some of the most forward-thinking companies, where these solutions provide varied functions and departments with real visibility into internal operations, the board almost always sees a PowerPoint or Word summary of those operations, which they are expected to use to make strategic decisions.
These kind of static summaries are about as useful or representative as a single frame from a movie – yet the board is expected to make decisions on this information, which may already be outdated by the time it is formally presented.
The consequences can be serious. Given how long it can take to plan and execute a board’s strategic initiative, acting on information that is out of date can be disastrous. Consider, for example, a retailer whose most recent sales summary shows an increase in sales in an Indian market, prompting board decisions to invest additional resources in building a factory there. Implementing such a plan can take a year’s worth of work, from construction to hiring. Now consider that, two months into planning, sales in that market stagnate. In order to plan effectively and avoid wasting resources – perhaps put the project on hold for a bit – the board must have regular access to the real-time operational visibility available to company employees.
This is where boards could really benefit from continuous controls monitoring – and its capabilities for generating rules and exceptions to rules using real-time data. If boards were able to tap into this intelligence, they could make decisions incorporating these rules to allow for changes in circumstances. So, for example, they could plan to build a factory in India provided that sales stay within certain defined parameters – with sales below those figures to be flagged as exceptions and reviewed by the board.
By taking assumptions out of planning and instead hardwiring set parameters into a project plan, the board can be sure that key assumptions are always factored in, and that they are working with the most up to date, accurate intelligence possible.
We often hear talk of how investments in governance, risk and compliance can bring broader ROI to the enterprise, and this is a key example of how visibility into controls can have far-reaching positive impacts on a company.
Tags: corporate boards, Controls Intelligence, IT, ROI,
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November 25th, 2009 at 9:36 am
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February 18th, 2010 at 12:49 pm
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