Corporate Governance—What Enterprise Content Management Was Meant For
Organizations throughout the world have successfully deployed a range of enterprise content management (ECM) solutions to address many organizational needs. Companies and governments use these solutions to address legal and regulatory compliance issues, to support specific business processes, to archive e-mails and to manage their organizational records. With these solutions in place, organizations are now wondering: "What is the next major challenge for which ECM can provide real corporate benefit?
The answer to that question can be found in the solutions that have already been implemented at a departmental level by many organizations. The type of problems that enterprise content management has already addressed provides a critical clue that leads us to the next major phase of ECM deployment. When we review the processes, documents and records currently managed and controlled by ECM-based applications, we can see a common theme—the majority of these applications help organizations improve their control over processes and information that governs the organization and helps to increase the organization's effectiveness, efficiency and integrity.
The general term for the collection of processes that control the organization is "corporate governance." When an organization uses an ECM solution to manage and track contracts, it has implemented one aspect of a governance solution. Every legal or regulatory compliance solution is designed to help improve the organization's ability to manage, track and control its governance-related issues. When a financial services organization uses a combination of collaborative tools and document management to make it easier for their clients and staff to work together on a deal, they are performing activities that may directly affect the overall transparency, and therefore the governance, of the organization. However, these types of distinct solutions do not provide a complete, end-to-end, enterprise-wide solution to the issues and challenges of corporate governance. To do that, we need to take ECM deployments to the next level and to think in bigger terms about the information and documents moving inside and outside the organization.
Seeking Governance
Corporate governance is a term that embodies all of the process, policies, procedures and records that an organization uses to make decisions and carry those decisions out. The OECD, the Organisation for Economic Co-operation and Development, in Principles of Corporate Governance (2004), defines corporate governance as follows: "Corporate governance involves a set of relationships between a company's management, its board, its shareholders and other stakeholders. Corporate governance also provides the structure though which the objectives of the company are set, and the means of obtaining those objectives and monitoring performance are determined. Good corporate governance should provide proper incentives for the board and management to pursue objectives that are in the interests of the company and its shareholders and should facilitate effective monitoring."
Corporate governance is not something that is mandated or enforced by governments or other regulatory bodies. It is the set of best practices that provides for the effective, open and visible management of an organization. While compliance with the applicable legal and regulatory rules is critical to effective governance, many of the new rules have been put in place due to the lack, or seeming lack, of visible corporate governance within many organizations. Good corporate governance practices lead to better compliance, but more importantly these behaviors lead to better organizational operation and increased shareholder and stakeholder confidence because of the increased visibility and monitoring that is put in place.
An enterprise content management suite has all of the tools to help organizations manage and improve the processes that are the core of corporate governance. ECM-based document repositories, with full audit and access controls, ensure that the organization's documents are secure and available. ECM suites also provide records management— especially disposition—that is critical to the management of the important documents and records that form the foundation of the business. By ensuring that the organization has a set of policies and a process for the identification of records and their subsequent disposition (along with a secure document repository for active documents) the management team and the board of directors can be assured that they have the correct documents and records and that they can communicate their trust in the information that they are providing to all stakeholders. Knowledge management tools integrated into an ECM solution provide powerful searching capabilities, across many different repositories, in order to assist the organization in finding the right documents, records, policies or procedures. Content-based business process automation tools allow the organization to automate, control and track the activities that support the organization. Automating the processes is critical, since effective corporate governance is embodied in the processes. The intention of automating the processes is not the elimination of the manual efforts, it's the ability to track and log the steps and tasks in the process. This provides the organization with assurance that the right activities are happening and allows for the effective audit of the process. Good governance involves effective communication, and ECM solutions provide that through collaborative tools that allow different groups, such as management and the board of directors, to share information and produce the documents they need. ECM suites can also provide portal tools to facilitate communication with internal and external stakeholders, such as employees and shareholders. Finally, a complete ECM suite provides business intelligence and data transformation tools that enable the extraction and reporting of information from many other organizational business applications and processes. This adds the value of structured information to the unstructured information contained in the documents and ensures that all are presented with all of the information they need, regardless of its source.
ECM-Enabled Governance
Organizations that use enterprise content management to automate, track, manage, control and monitor all of the documents and processes across their entire enterprise have the opportunity to demonstrate that the organization is above reproach. It also allows them to gain significant operational efficiencies. What would an organization look like if it used enterprise content management to address all of the enterprise-wide processes associated with corporate governance? Let's start with the board of directors and the executive management of the organization. The organization would have in place a completely automated system for the identification of issues and the creation of the agenda for all board meetings. This system would ensure that all board members received the required documents with sufficient time for their review and for any questions to be raised. Management would be able to monitor when documents had been reviewed and auditors would be able to validate that board members had full access to the correct documents.
The organization would have a shareholder correspondence management system in place, ensuring that all messages from shareholders were recorded, tracked and responded to. The system would ensure that the right person is assigned to respond. The designated responder could use the knowledge management tool to search all the documents and records in the organization to formulate the response. The responses would be recorded and tracked, both in substance and in time, to create a full audit trail. The system would link to the agenda and issues management system so that issues raised by the shareholders could be placed on the board's agenda.
The organization would use one ECM suite to address all of their compliance-related issues, even if the information, documents and records were stored in multiple repositories and databases. The organization would save significant money and time by using one system, but it would also allow for a comprehensive view of the status of all governance-related processes throughout the organization. Because we are dealing with corporate integrity, customer assurances and shareholder trust, it is critical that the executive and board of the organization know the "pulse" of the company, not just those items that may have audit or compliance implications. This complete view of the status of every process would allow the organization to take remedial action before an issue became a shareholder, media or regulatory issue.
The organization would have a complete records management file plan and would always know that their records could pass any audit or review that might be required. The system would also ensure that any document or record required to respond to a shareholder request or to provide a board member with additional information would be available when it was needed.
Corporate governance is important, not only due to the changed regulatory climate that all organizations must function in today, but because letting shareholders, employees, partners and customers know that you have the right tools, policies and processes in place for good corporate governance is becoming a crucial advantage. Applying enterprise content management lets organizations focus on their objectives and increase the value they bring to all of their stakeholders.
Hummingbird is a leading global provider of enterprise software solutions, employing more than 1,450 people in 40 offices worldwide. Hummingbird Enterprise™ 2004 is a state-of-the-art integrated enterprise content management platform that enables organizations to securely access and manage business information such as documents, records, e-mail or financial data.