Boards are responsible for strategy – and oversight. Oversight often means taking care of the mundane and the uninteresting. Boards are in a key position: unless a board steps in to pay attention to the mundane, organizations may miss crucial opportunities. A typical example of this is data governance.
A data governance framework is imperative
Data matters every day. It’s pervasive and it’s essential. No business of size operates without extensively collecting and manipulating data throughout its operations.
Data governance may not be the most exciting topic, but organisations that lack a framework for it are subject to security and compliance risks and may well lose out on the opportunities of today’s data-driven technology revolution.
Organisations have frameworks covering a range of operating aspects – from HR through to health and safety. Data is no different, aside perhaps from the fact that data is not just a risk factor, but is also an opportunity. Key reasons why companies need such a framework include:
Improved service, better decision making
Your organisation relies on data to serve its clients, to inform operations and to make strategic decisions. A formal framework helps ensure that the data you hold about your clients and your business is accurate and complete – leading to better decision making.
In fact, your data has the potential to be the fuel that powers your business – as long as your company extracts maximum potential from its data. Companies must the key first step to govern data collection, storage, and use.
Whether it’s an angry employee walking out with armfuls of valuable data, an external attacker stealing with intent, or a common ransomware attack, your data is always at risk. Data governance mitigates these risks by putting in place security measures and protective policies.
An effective data framework prevents accidental data spillage and makes it more difficult for malevolent actors to steal data. It also establishes processes that help organisations respond in case of data loss and other worst-case scenarios.
Related to security is the increasing compliance exposure implied by processing data, particularly in healthcare and financial sectors. A lack of appropriate data governance policies can lead to large fines, even in the absence of a breach or data loss.
Proper governance ensures that companies comply with the rules of the day. These rules are broad-based, ranging from the recently implemented GDPR right back to the Sarbanes-Oxley Act.
What does data governance involve?
Data governance is a codified set of organisational principles, rules, and procedures. First, it ensures that data quality is always maintained and that your organisation’s data is used to its maximum potential. Next, it takes account of contemporary security risks, putting in place mitigating procedures. Finally, it takes a view on current laws. While the law affects every organisation, the applicability and severity of laws vary depending on the exact nature of your business.
An effective data governance strategy will examine your company’s compliance exposure and put the necessary measures in place – as demanded by law, and as required by a risk-averse approach.
Key elements of a data governance framework
A piece of paper with well-intentioned policies does not constitute an effective framework. Instead, data governance is an ongoing, everyday engagement that depends on the power of technology, individuals and teams, and, of course, key processes.
- Teams because data governance is a deliverable that requires day to day activities, medium-term planning, and long-term vision. Effectively governing data implies a dedicated team to press for quality and to promote the purpose of data. More broadly, it requires an organisation-wide shift in culture.
- Processes to deliver powerful, reliable tools that maintain the integrity of data, ensuring consistent collection, and persistent quality. Processes also maintain compliance, while providing a strong layer of protection against security threats.
- Technology as the enabler of data governance because technology automates and ingrains processes. Yet technology plays an even more powerful role in harnessing data. From established BI products across to contemporary AI insights and machine learning capabilities – technology supports a data framework that drives results.
So, data governance is a comprehensive, long-term activity that requires an integrated mix of people, procedure, and tech smarts.
What is the board’s role?
Where there is little in place in the way of data governance, not to mention an actual framework, boards must kick-start the process. Asses the extent of data use and find out where the risks – and the opportunities lie – and address these.
It is essential for boards to appoint an in-house team or at the very least a single individual that is accountable for data governance. This is because boards are generally not involved in the day to day operations of the organisation that they oversee.
Boards must then continuously communicate with the individuals or teams responsible. This is crucial as organisational strategy affects data governance goals, and the practical elements of its rules.
That said, boards should also facilitate communications between these teams and the rest of the organisation.
Again, data governance is an unexciting topic that can easily end up at the bottom of the to-do list. It is the role of boards to ensure that the entire organisation takes these governing principles.
Unsure where your organisation stands? Consider adding a data governance review as a board activity in your next board meeting.