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IT Governance Fundamentals for Board Directors

1. Role of the Board in IT Governance

  • Board’s Duty: Ensuring IT decisions align with overall strategy

  • Why It Matters: Poor oversight of IT risks can impact financial health

  • Analogy: IT is to operations as financial controls are to accounting

  • Key Question: How does IT risk compare with other business risks?

2. IT Strategy & Alignment with Business Goals

  • Strategy First: IT should support business growth—not drive it blindly

  • Practical Example: Just as budgeting guides spending, IT strategy prioritizes technology investments

  • Board’s Role: Ask: "Will this IT initiative provide measurable business value?"

  • Discussion: Where has technology accelerated (or slowed) your organization’s goals?

3. Understanding IT Risks (Cybersecurity, Data Privacy)

  • Trend: Cyber threats = growing risk to reputation & finances

  • Board’s Responsibility: Oversee cyber risk as actively as financial risk

  • Term Spotlight: Data privacy is the new compliance frontier

  • Scenario: What would happen if confidential data was leaked?

4. IT Investment: Budgeting & ROI

  • Finance Lens: Treat IT budgets as investment portfolios

  • Watch Out For: Hidden costs, unclear payback, "shiny object syndrome"

  • Board Approach: Demand simple ROI analysis: Ask, "How will this spend deliver measurable value?"

  • Example: Compare IT investment review to capex budgeting

5. Legal & Regulatory Compliance

  • Regulatory Risk: Cyber, privacy and data laws carry real penalties

  • Board’s Duty: Stay informed—make sure IT compliance is tested

  • Board Question: "Which regulations affect our data and systems?"

  • Practical Step: Map compliance checkpoints to audit processes

6. Digital Transformation & Change Management

  • What is Digital Transformation? Moving from legacy systems to modern platforms (with new risks & efficiencies)

  • Finance Analogy: Like automating payroll—process change, not just tech change

  • Board’s Role: Require a business case, ask for post-launch reviews

  • Top Tip: Test for staff buy-in and training, not just system rollout

7. IT Performance Monitoring & Reporting

  • Board Oversight: Monitor IT performance as you do finance—regular reviews, clear metrics

  • Sample KPIs: Uptime %, service incidents, cost savings

  • Board Action: Challenge jargon; ask for business impact

  • Question: What number would indicate “success” for this IT project?

8. IT Governance Frameworks (COBIT, ISO/IEC 38500)

  • What Are Frameworks? Tools to guide IT oversight—like accounting standards for your finance team

  • Board’s Benefit: Clarity, consistency, comparability

  • Nuance: Don’t memorize; focus on what the framework requires directors to do

  • Action: Ask how your organization uses these standards

9. Cloud Technology & Outsourcing Risks

  • Cloud’s Promise: Flexibility, scalability—at a cost

  • Management Analogy: Like hiring outside accountants: benefits & external risks

  • Board’s Job: Check "exit plans" and backup procedures

  • Board Question: "How do we ensure the provider’s reliability and our data’s safety?"

10. Business Continuity & Disaster Recovery

  • Disruption Happens: Fire, cyber attack, outage—are you ready?

  • Finance Analogy: Business continuity is insurance for your operations

  • Board’s Focus: Confirm plans are tested, updated, and documented

  • Ask: "When was our last recovery drill? Can we see results?"

11. Information Security Responsibilities

  • Board Duty: Ensure company’s information is protected like financial assets

  • Perspective: Security is ongoing—not a one-off project

  • Action: Implement simple reporting on breaches, risk status

  • Board Question: "Do our staff and contractors understand their security duties?"

12. Board-Management Collaboration in IT

  • Partnership: Board asks strategic questions, management manages execution

  • Balance: Avoid micromanaging—focus on outcomes, not tech specs

  • Board Tip: Request summary reports—no need for technical detail, just impact and alignment

  • Discussion: What works best for board-management dialogue in your organization?

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