Good governance encompasses the processes, practices, and policies that form the cornerstone of companies enabling leaders to responsibly manage their companies. Consequently, technology is mission-critical and crucial to the survival of a business. Human intervention is prone to error, omission and manipulation, technology, on the other hand, allows for better transparency. As such, technology helps in streamlining board activities and create greater efficiency. Digital tools are becoming central to good governance since they reduce opportunities for corporate fraud and corruption.
Technology offers corporations a new dimension of tools that enhance their ability to conduct business efficiently. It has played a major role in the evolution of what constitutes good governance thus, creating a series of positive effects on the corporation’s governance. Such positive effects can be summed in four major areas as: a) technology increases transparency, information, and accountability, b) technology increases public participation, c) Technology promotes efficient delivery of public goods and services, d) technology offers a level of security to combat cyber risks.
Utilizing technology to improve governance requires innovation and technical expertise combined with a corporate culture that fosters and supports best practices for good governance. In essence, corporate governance is the standard of rules that allows organizations to ensure that they are serving the needs of their shareholders, stakeholders, management team, and customers effectively and responsibly. Consequently, technological innovation needs to develop comprehensive business solutions, and innovation will also work toward enhancing good governance principles.
Nowadays, boards are using a number of technological solutions like electronic board portals which have become staple tools for board directors. These electronic board portals create a secure environment for administrators and board directors to access meeting materials, communicate with each other, and execute their governance responsibilities. Using such technology allows for more productivity and transparency in the corporation compared to traditional reporting methods.
These portals, among other digital governance solutions allow for quick access to important and sensitive documents that enables directors more flexibility and enhances their responsiveness and efficiency. This, in turn, helps eliminate mistrust and misinformation.
Determining a digitalization strategy will be complex because of the changing business environment. Digital transformation requires fundamental changes in an organization’s culture, operations, and processes. Therefore, a systematic approach is needed to integrate digitalization into strategic plans, establish the right policies and design an appropriate information architecture across the organization. Thus, boards need to demonstrate that they understand reasons their companies could benefit from digitization and how they can support the digitization effort. Boards can play an important role in signaling the need for new data governance rules. Additionally, shareholders are looking for proof that boards are committed to good corporate governance. Adding board directors with technical expertise and bringing digital governance solutions into the boardroom demonstrate boards’ commitment to the principles of good corporate governance.
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