Information Governance An emerging issue in today’s commercial reality

1. Information Governance • An emerging issue in today’s commercial reality By Keith Coulthard Information Risk Management, KPMG

2. Contents • Introduction • Corporate Governance : Humble beginnings • Corporate Governance : The modern world • Information Governance : Emerging issue • Case studies • Conclusion • Questions and answers

3. Humble beginnings “The nuts and bolts of how a public company fulfils its responsibilities to investors and other stakeholders” The Wall Street Crash 1929 - Time For Change Two Brothers Vs The New York Consolidated Gas Company Source: Ending the Wall Street Walk: Why Corporate Governance Now?, Http://www.corpgov.net/forums/commentary/ending.html, 20/10/99

4. Conflicting priorities The Board Member Company status Individual status Short term gain High pay

5. Conflicting priorities Vs The Board Member Company status Individual status Short term gain High pay

6. Conflicting priorities Vs The Board Member Company status Individual status Short term gain High pay Shareholders Shares to increase in value Higher dividend payments Longer term security

7. The modern world • Interested parties • Pension Fund Power • CalPERS • The Cadbury Committee • The Turnbull Committee

8. The Turnbull report • Nature and extent of the risks • Categories of risk • Likelihood of the risks materialising • Ability to reduce risks’ incidence and impact • Costs of controls relative to the risks Source: Machin & Steet, IT risks - will Turnbull wake up the board?, Datawatch, Vol 41, Summer 1999, p18

9. ECOMMERCE TIMES Gordon Brown Sandy Philips INTERNATIONAL FT MONEY 2 years in Hong Kong Separate sections FT Index reaches 10,000 Page 14 Japanese Yen tumbles again Interest Rate collapse - in depth investigation http://www.FT.com FRIDAY APRIL 13 2000 £1.50 Information Governance • Strategic importance • Business - IT linkage • Role as change agent • Knowledge management • Operational data • Competitive advantage Mouse data merger rumor. Mouse data of Ireland today confirmed rumours of a potential merger with J. Sainsbury. This follows months of speculation that the two may at last merge. Most significantly, this move will see the last independent debt collection agency move out of family ownership - Page 13 “The Judicious and competent management of people and information to optimise the value, security and control of systems-enabled business processes” Sterling lost nearly 8 pfennigs against the D-Mark yesterday after the market was swept by an unconfirmed report that Britain was again considering rejoining the ERM for the fourth time in as many years. The UK Treasury dismissed the report, but nonetheless the rumor set Sterling sliding fuelled by a falling dollar. Sterling dropped 7.76 pfennigs against the D-Mark. Sterling lost nearly 8 pfennigs against the D-Mark yesterday after the market was swept by an unconfirmed report that Britain was again considering rejoining the ERM for the fourth time in as many years. The UK Treasury dismissed the report, but nonetheless the rumor set Sterling sliding fuelled by a falling dollar. Sterling dropped 7.76 pfennigs against the D-Mark. Sterling lost nearly 8 pfennigs against the D-Mark yesterday after the market was swept by an unconfirmed report that Britain was again considering rejoining the ERM for the fourth time in as many years. The UK Treasury dismissed the report, but nonetheless the rumor set Sterling sliding fuelled by a falling dollar. Sterling dropped 7.76 pfennigs against.

10. Corporate IT technology Turns knowledge into value Brings competitive advantage Risk based approach Confidence for the company Security for stakeholders Increased value and security for all The process ? Information People with knowledge Operational data Strategic information

11. WRONG ! WRONG ! WRONG ! The process ? Information People with knowledge Operational data Strategic information Corporate IT technology Turns knowledge into value Brings competitive advantage Risk based approach Confidence for the company Security for stakeholders Increased value and security for all

12. Process control Technology control · Economic factors · Consumers · Suppliers Inputs Supplier’s Bank Customer Bank Banking Network Markets Substitutes Prior business plans · · · · Historical performance · Stakeholders · Legislation Competitor research Management/ Political influences · · · employees · Technology Financial Settlement and Tax Financial Settlement and Tax Assess external environment Activities Develop Interface with Identify resource Define strategic Measure other business / strategies & other needs & set Assess internal opportunities & planning & monitor plans objectives operations & culture threats Order ERP ERP Secure e-commerce · Mission statement · Risks and sensitivities · Training programmes Outputs · Strategic objectives · Financial projections · Performance reviews Organisational structure Clear allocation of responsibilities Competitive position statement · · · · Policies · Capital requirements · Business plan · Customer needs identified · Human resource/needs · Communications strategy Sales Workbench Intranet · Target markets identified Product Database Electronic Catalogue Order Approval Fulfilment Buyer Supplier The right way No need for operational review ! Information is clean Only need to review after strategic change

13. Case studies Customer Service Egg.com Customer Confidence Geest with Sainsbury E:bay It’s only usefulif it’s true ! Web Advantage ? Argos Using Information Labour party Tesco clubcard Sources: http:www.redherring.com, BBC online, http://www.ecommercetimes.com

14. Case study : loyalty cards Loyalty card introduced 16 14 12 Market Tesco 10 Share (%) 8 J. Sainsbury 6 Asda 4 Safeway 2 0 1994 1995 1996 1997 1998 1999 Source: IGD, Press information, Grocery market shares, 27/10/99

15. CORPORATE GOVERNANCE CEOs Vs Shareholders Pension funds and other external pressure Internal financial controls and policies INFORMATION GOVERNANCE Strategic asset Operational value Part and parcel of processes Conclusion Knowledge is power !