Resources for Sarbanes-Oxley (SOX)

IT Governance - the Role of the Board

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“A lack of board oversight for IT activities is dangerous, it puts the firm at risk in the same way that failing to audit its books would“.

The above opinion was expressed by Richard Nolan and F. Warren McFarlane both of Harvard Business School, and was made in the context of companies investing in and using Information Technology. It should be appreciated that there are certain dynamics that drive concerns about information technology that are probably still in embryonic form in our local context. One such dynamic is the intensity of the use of the open capital markets and the concomitant obligations on the part of the Board of Directors to their shareholders for prudent management the funds that are entrusted to them. From an IT perspective this has resulted among other things, in concerns about the appropriateness of “mega projects” such as Disney Corporation’s “go.com” project (shut down after 878M in expenditure) or Nike’s 400M investment in software (subsequently written off as a disaster). In the local context business executives in both the public and private sectors no doubt have their own horror stories to tell of IT investments and even though in absolute terms the sums involved may be several times less, in relative terms, the effect is similar and the frustrations are probably identical.

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