Governance, management and business success

The role of governance frameworks in delivering business benefits debated at Computer Society event

Companies managing their ICT assets well turn in consistently higher profitability than their peers and command a premium on the sharemarket, studies suggest.

A presentation and discussion organised by the NZ Computer Society this month in Wellington considered this equation, and particularly the role of governance frameworks such as COBIT in delivering business benefits.

Do good governance and prudent management necessarily go together?, asked principal presenter Matthew Nicho, of AUT University; or are there other factors involved in good management, which arise from the same mindset that produces good governance?

A similarly misleading relationship could exist between good governance in general and good governance in ICT, said one participant; the latter could be an effect rather than a cause, with good general governance producing the benefits.

The studies in question are ageing, Nicho admits. One series cited, from PricewaterhouseCoopers, produced encouraging figures from 2003 and 2005 together with some indications of how the situation might be improved; but he has yet to analyse the 2007 figures fully.

Nevertheless, participants in the discussion agreed that the same factors still hold today and are probably more relevant in straitened economic times.

Nicho’s figures indicate that comparatively few local companies have adopted COBIT and many of those that have done so have no satisfactory measurement of whether it is leading on to good management.

Disinclination to adopt COBIT and measure its impact could be an outcome of the smaller size of New Zealand companies, some suggested; the cost of implementation looms larger in small companies which also lack the organisational structures implied by such frameworks.

When managers and staffers wear “half-a-dozen hats”, the framework is distorted, one participant said.

In the absence of objective measurement, there is a danger for compliance with a framework to become an end in itself, some said.

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