1. IT GOVERNANCE GSI 615 Carmen R. Cintrón Ferrer © 2014

2. IT Governance  Why?, What?, How? Employee engagement – Who’s Sinking Your Boat?Who’s Sinking Your Boat? Applicable lessons: Governance IT Governance Ethics & Social Responsibility Carmen R. Cintrón Ferrer, 2014, Reserved Rights 2

3. IT Governance  Scope  Governance  Risk Management  Compliance  IT Resources Management  IT Governance  IT Leadership and Innovation  Governance and Ethics Carmen R. Cintrón Ferrer, 2014, Reserved Rights 3

4. Introduction  Conceptual Definitions:  Information Resources (ITC)  ITC Value  GRC or ECRG  Strategic Planning  Manage vs. Lead  Innovation  Social Responsibility Carmen R. Cintrón Ferrer, 2014, Reserved Rights 4

5. Social Evolution Agrarian Industrial Services Knowledge Property and Economic Transformation 5 Carmen R. Cintrón Ferrer, 2014, Reserved Rights

6. Structural and Legal Comparison Carmen R. Cintrón Ferrer, 2014, Reserved Rights 6 PeriodStructureEconomyLegalGovernance (Power & Justice) Property NomadsTribal/ Closed Informal Agrarian Natural LawInformal CentralizedCollective Primitive Societies & Early Empires Larger Clusters Semi-Closed AgrarianNatural- Positive Law Formal Hierarchical Partially Decentralized Private & Collective Medieval Cities & Kingdoms Closed with some trade Agrarian Incipient small scale industries Positive Law Codes Formal Hierarchical Centralized Private Slavery & Property Rights Renaissance Kingdoms & Countries Modern Empires Ample trade Semi-Open Agrarian Pre-Industrial Professions Services Constitutional Nation State Trade Agreements Partially Decentralized (Limited Sharing) Natural/Legal Person Private Slavery & Property Rights Modern Countries Republican Nations Open Trend Agrarian Industrial Service Corporations Globalization Segregation of Power Citizenship & Individual Liberty Private Common Privacy/Personal Knowledge Society Virtual Open Collectives Knowledge Digital International Cyber Law Decentralized Networked Knowledge (IP)

7. Prioritizing Exercise Carmen R. Cintrón Ferrer, 2014, Reserved Rights 7 SocietyLandEquipmentPersonnelInformation Technology Agrarian Industrial Services Knowledge

8. Information Resources  IT Infrastructure  Telecommunications Technologies  Data/Data Repositories & Intellectual Property  Business & IT Processes - Business Intelligence  Personnel (IT and Knowledge workers) Is the enterprise reliant on these resources? Is IT management doing the right things? Doing them the right way? Is the enterprise getting the benefits? Is there Value added into IT investments? Carmen R. Cintrón Ferrer, 2014, Reserved Rights 8

9. Why IT Governance? Information Resources: is critical to the operation of any organization is strategic to business involves a significant investment is a major risk component Information Resources (IT) requires more attention from top management Carmen R. Cintrón Ferrer, 2014, Reserved Rights 9

10. ITC – Governance Carmen R. Cintrón Ferrer, 2014, Reserved Rights 10  Increase efficiency  Increase effectiveness  Increase value/benefits  Reduce Risk Perform an impact analysis of achieving all, from the perspective of each type of resource.

11. IT Governance Exercise Carmen R. Cintrón Ferrer, 2014, Reserved Rights 11 Governance Objective Personnel Time/Effort Information Technology Fiscal Investment Controls Increase Efficiency Increase Effectiveness Increase Value/Benefits Reduce Risk

12. Governance Carmen R. Cintrón Ferrer, 2014, Reserved Rights 12  Plato first used the Greek term that means to steer  Inserted into organizational management for:  Implementing an internal control system  Monitoring executive’s performance  Assuring stakeholders objectives are met: Internal (Board, management, personnel …) External (Shareholders, debt holders, community, et al.)  Mitigating risks  Relevance is due to major corporate scandals

13. Governance  The Governance Problem: How it started (Video)Video  What is Governance (BrownDog Consulting)BrownDog Consulting  Enron  Tyco International  WorldCom  Adelphia  Peregrine Systems  General standards for Governance:  Cadbury Report (PDF)PDF  OECD Principles of Corporate Governance (Reference site)Reference site  SOX (Sarbanes-Oxley) (PL- 107-204, 2002)  SOX Best Practices (Video)Video  Inyathelo on Governance (YouTube Video)YouTube Video Carmen R. Cintrón Ferrer, 2014, Reserved Rights 13

14. Governance  Leadership capabilities  Structural support (Roles/Responsibilities)  Decision making processes  Information and Technology infrastructure:  Integration  Support  Results assessment Carmen R. Cintrón Ferrer, 2014, Reserved Rights 14

15. Governance principles Carmen R. Cintrón Ferrer, 2014, Reserved Rights 15  Rights and equitable treatment of shareholders  Interests of other stakeholders  Role and responsibilities of the board  Integrity and ethical behaviour  Disclosure and transparency

16. OECD principles for Governance Carmen R. Cintrón Ferrer, 2014, Reserved Rights 16  Auditing  Board and management structure and process  Corporate responsibility and compliance  Financial transparency and information disclosure  Ownership structure and exercise of control rights Are there other European Models?

17. Governance principles in US Carmen R. Cintrón Ferrer, 2014, Reserved Rights 17  Shareholder interests  Investor interests  Market (i.e.: NYSE, NASDAQ & Credit Rating Services)  Governance standards provided by:  Securities and Exchange Commission (SEC)  Financial Accounting Standards Board (FASB)  Legislation (SOX, Dodd Frank Act)

18. Governance, Risk, Compliance & Ethics Model Risk Management ComplianceGovernance Ethics Trust Governance Model (CRCF,2007)CRCF,2007 Carmen R. Cintrón Ferrer, 2014, Reserved Rights 18

19. OCEG Model – Combined compliance metrics Combined compliance metrics Carmen R. Cintrón Ferrer, 2014, Reserved Rights 19

20. Governance Exercise Models & Principles comparison Carmen R. Cintrón Ferrer, 2014, Reserved Rights 20  What does the different models have in common? (See Note)  Are there any significant differences?  Emphasis  Interests  Controls (Internal/External)  Regulatory compliance – coercive effect  Which are the expected benefits?  What role does Trust play?  Is IT a key factor? Note: D.F. Larcker, International Corporate Governance, Center for Leadership & Research, Stanford Graduate School of BusinessInternational Corporate Governance