The objectives of corporate governance can be discussed under the following subject areas:
1. Transparency: Transparency is key in gaining shareholders and investor’s confidence in a business. The SAP system allows for online real-time access to information that can be used for decision making. Before transactions are posted into the system, it is important to ensure that processes leading to the transaction are very transparent. Corporate governance encourages organizations to make sufficient disclosures about their financial statement. Internationl Financial Reporting Standards (IFRS) is very strong in this regard, especially as it requires more disclosures when compared to local standards.
2. Efficiency: Corporate governance seeks to bring effectiveness and efficiency to processes and operations of an entity. Continually, processes should be reviewed to ensure that they are effective and in line with corporate objective and strategy. This is what corporate governance aims to achieve. Processes such as period end closing, stock taking, modification are expected to be carried out in an effective and efficient manner.
3. Monitoring: Continuous monitoring and compliance with regulations and pronouncements is an important objective of corporate governance. On a defined basis, an entity must make sure that new regulations are adopted as at when due to avoid the attendant implications – jail term, loss of brand and image etc.
Central to achieving these objectives are appropriate tools – technology and systems. Hence, to effectively enforce corporate governance, IT governance is Key!