National Corporate Governance Codes and IT Governance Transparency in Annual Reports

Abstract

IT governance is concerned with the oversight of IT assets, their contribution to business value and the mitigation of IT-related risks. Emerging research calls for more board level engagement in IT governance and identifies profound consequences for digitized organizations in case the board is not involved. Against this context, this article analyses how corporate governance codes are guiding boards to provide transparency on how they treat IT governance. The findings show that only the South African corporate governance code, King III, contains a significant amount of IT (governance)-related content. As a second objective, this article builds on these findings by providing an exploratory insight in the contemporary state of IT governance transparency in Belgian and South African companies. This way, the influence of the national corporate governance code on IT governance transparency is explored. The authors' findings show that South African firms tend to be more concerned with IT governance transparency in their annual reports than Belgian firms, given a comparable IT strategic role and ownership structure. Accordingly, the case is made for including more IT (governance)-related guidance in national corporate governance codes, as this might enable companies to be more transparent about their IT governance.

Board of Directors, Audit Committee and Firms’ Performance

“…Below we find a conceptual model (Figure 2) of effectiveness and firm performance. Based on (De Haes et al, 2019), the financial expertise of an audit committee improves financial reporting quality and betters its diligence, moreover, the aforementioned authors argue that the more financial experts are present on the committee, the higher the quality of earnings and the less likely the financial statements will be restated. The same findings were documented by (de Villiers & Dimes, 2021) in which the possibility of financial restatement decreases in the event where the members of the audit committee are financially knowledgeable.…”

The Role of Compliance Requirements in IT Governance Implementation: An Empirical Study Based on COBIT 2019

“…Hardy [3] discussed how IT governance in general, and the COBIT framework (version 4.0) in specific, can be used to respond to legal, regulatory and compliance challenges. Other authors have discussed the issue of 'IT governance transparency', and how this may be related to (changing) compliance requirements [17][18][19][20]. It as such appears that an appropriate IT governance approach is required to ensure regulatory compliance, and that an organization's compliance requirements may have an influence on (the appropriateness of) its IT governance approach.…”

How do information strategy and information technology governance influence firm performance?

“…ITG functions in the same way as enterprise governance to enable an enterprise 10.3389/fpsyg.2022.1023697 to more effectively address major business issues such as enterprise resource planning (Lainhart, 2000). Hence, ITG has received increased attention from business practitioners and researchers (De Haes et al, 2019;Matta et al, 2022). Specifically, ITG includes the management mode of technical resources, stakeholder balancing mechanism, technical level, and the alignment of IT and business systems.…”

“…Information technology governance forms an important and integral part of an organization’s corporate governance ( Lunardi et al, 2014 ; De Haes et al, 2019 ). ITG functions in the same way as enterprise governance to enable an enterprise to more effectively address major business issues such as enterprise resource planning ( Lainhart, 2000 ).…”