my presentation on technology in corporate governance & ethics class
DESCRIPTION
I created this slide deck and taught it to the MBA class. Chapter 12 on Technology in Corporate Governance & Ethics was outdated. So, I scrapped the entire chapter, did all of the research and re-wrote it with updated facts and appeal. The teacher liked it so much that he sent a copy of it to the book's author. Note: almost every slide has "action", but SlideShare cannot show it unless you download the entire deck and run it locally.TRANSCRIPT
Chapter 12
Technology and Corporate Governance
Margaret Dischler
• Information Technology’s important role
• The Cybercompany Model• Security Controls• Q&A
Technology and Corporate Governance
P r e s e n t a t i o n To p i c s
Cost reductions – eliminate data entry
Better accuracy and consistency
Quicker access to data – better decisions
More transparency
Information Technology’s Important Role in GovernanceGains in Efficiency and Effectiveness
II. Electronic Shareholder Communication
I. eCommerce – huge, established
III. Electronic Financial Reporting
IV. Electronic Continuous Auditing
Information Technology in Corporate GovernanceThe Cybercompany Model – 4 Aspects *Updated*
Receive Reports
Electronically
Proxy vote request
electronically
Social Media is Highly
Influential
Cybercompany Model – Aspect IIElectronic Shareholder
Communications
Cybercompany Model – Aspect IIElectronic Shareholder
Communications
Cybercompany Model – Aspect IIElectronic Shareholder Communications
Convinced Blackberry and HP to separate roles of CEO and Chairman
Convinced GE to better align CEO compensation with company performance
Pressured disclosure of chemicals being used at Chesapeake Energy
Water use reduced 25% at General Mills
Many More!
• SEC Mandate for XBRL
• CIO or IT manager is responsible to support compliance with SOX
• XBRL is the “glue”
Cybercompany Model – Aspect IIIElectronic Financial Reporting
Savings
Quality
Efficiency
What the barcode has done for product distribution …
What is
?
Cybercompany Model – Aspect IIIElectronic Financial Reporting
… is what XBRL is doing for business reporting
XML Markup: What Does it Look Like?
Gerald Bostock8080 Floppy Disk DriveSan Sushi, CA 94078+1 (650) 555-1424Birthdate: 19 October 58
<name>Gerald Bostock</name>
<address>
<street>8080 Floppy Disk Drive</street>
<city>San Sushi</city>
<state>California</state>
<country>United States of America</country>
<postcode>94078</postcode>
</address>
<telephone>6505551424</telephone>
<birthdate>1958-10-19</birthdate>
Metadata:Information about
information
Metadata:Information about
information
Ordinary informationOrdinary
information
Cybercompany Model – Aspect IIIElectronic Financial Reporting
Validation
Standardization
CalculationCash = Currency +
DepositsFormulas
Cash ≥ 0Contexts
US $FY2011
Budgeted
LabelcashCashEquivalentsAndS
hortTermInvestments
ReferencesGAAP I.2.(a)Instructions
Ad Hoc disclosures
PresentationCash & Cash Equivalents
XBRLItemXMLItemXBRLItem
PresentationComptant et Comptant
Equivalents
PresentationGeld & Geld nahe Mittel
PresentationKas en Geldmiddelen
Cybercompany Model – Aspect IIIElectronic Financial Reporting
More Than Just Definitions
Cybercompany Model – Aspect IIIElectronic Financial Reporting
Combines XML Schema, XML Link, and other XML-related specifications to give the data:
• Significant standardization and validation context • Independence - ability to be shared across applications, platforms and entities via domain level taxonomies.
Not shown:Xlink, Xpointer, others
Chemical Industry <SYMBOL>
Auto Industry <CAR-MODEL>
Publishing or Mythology
<GOD>
Music Industry <RECORD-LABEL>
Aerospace Industry <PROGRAM>
Astronomy <PLANET>
“Content in Context” (Industry-specific)
XBRL is a market-driven, global standard developed and published by XBRL International, Inc.
The manner in which Corporate Governance Functions operate has changed
Principles of fairness, honesty, transparency, responsiveness, accountability, and resiliance
Aspects of Shareholder value creation and enhancement
Other stakeholder value protection
No Change1 No
Change2 CHANGED3
Information Technology’s Important Role in GovernanceCybercompany Changes Governance - Chapter 2
Cybercompany Model – Aspect IVContinuous Auditing
Continuous auditing is defined as “a comprehensive electronic audit process that enables auditors to provide some degree of assurance on continuous information simultaneously with, or shortly after, the disclosure of the information”.
Continuous auditing enables the following benefits:
1. Reduction of the cost of an audit engagement2. Reduction of the amount of audit resources needed3. Increase in the quality of financial statement audits4. Specification of transaction selection criteria to choose
transactions or transaction cycles and perform integrated auditing
Technology and Corporate Governance
Board Security Controls – Top ConcernTHOMSON REUTERS SURVEY ADDRESSED BOARD VULNERABILITY TO DATA BREACHES UNSECURE ENVIRONMENTS
•Unencrypted board communications. Board documents stored on personal computers at home or work. •Board documents stored on personal mobile devices. •Documents sent to board members via personal, non-commercial e-mail addresses. •Board documents accessible through Wi-Fi or unsecured networks.
REDUCING INFORMATION SECURITY RISK •Well-secured board portals. •Secure e-mail accounts. •Passcode protection features. •Document encryption.
Efficiency, Effectiveness, Quality Gains
Security Pitfalls Exist and Will Continue
Power leveling and Transparency
It’s Not Going to Stop
Summary - IT in Corporate GovernanceInformation Technology Has Shaped Governance
