In: Accounting
What is the implications of directors or executives having knowledge in Information technology on (i) board (ii) existing or potential stakeholder (iii) society
i) Board
Ever since the Y2K scare, boards have grown increasingly nervous about corporate dependence on information technology. Since then, computer crashes, denial of service attacks, competitive pressures, and the need to automate compliance with government regulations have heightened board sensitivity to IT risk. Unfortunately, most boards remain largely in the dark when it comes to IT spending and strategy. Despite the fact that corporate information assets can account for more than 50% of capital spending, most boards fall into the default mode of applying a set of tacit or explicit rules cobbled together from the best practices of other firms. Few understand the full degree of their operational dependence on computer systems or the extent to which IT plays a role in shaping their firms’ strategies.
This state of affairs may seem excusable because to date there have been no standards for IT governance. Certainly, board committees understand their roles with regard to other areas of corporate control. In the U.S., the audit committee’s task is codified in a set of Generally Accepted Accounting Principles and processes and underscored by regulations such as those of the New York Stock Exchange and Securities and Exchange Commission. Likewise, the compensation committee acts according to generally understood principles, employing compensation consulting firms to verify its findings and help explain its decisions to shareholders. The governance committee, too, has a clear mission: to look at the composition of the board and recommend improvements to its processes. To be sure, boards often fail to reach set standards, but at least there are standards.
A lack of board oversight for IT activities is dangerous; it puts the firm at risk in the same way that failing to audit its books would - Understanding this, a small group of companies has taken matters into its own hands and established rigorous IT governance committees. Mellon Financial, Novell, Home Depot, Procter & Gamble, Wal-Mart, and FedEx, among others, have taken this step, creating board-level IT committees that are on a par with their audit, compensation, and governance committees. When the IT governance committee in one of these companies assists the CEO, the CIO, senior management, and the board in driving technology decisions, costly projects tend to remain under control, and the firm can carve out competitive advantage.
The IT strategy that works for a clothing retailer is not appropriate for a large airline; the strategy that works for eBay can’t work for a cement company - In this article, we show board members how to recognize their firms’ positions and decide whether they should take a more aggressive stance. We illustrate the conditions under which boards should be less or more involved in IT decisions. We delineate what an IT governance committee should look like in terms of charter, membership, duties, and overall agenda. We offer recommendations for developing IT governance policies that take into account an organization’s operational and strategic needs, as well as suggest what to do when those needs change. As we demonstrate in the following pages, appropriate board governance can go a long way toward helping a company avoid unnecessary risk and improve its competitive position.
ii) existing or potential stakeholder
A stakeholder is someone who has an interest in the way technology develops. It might be because they are a consumer of the technology, perhaps using it for socialising, playing games, communicating with friends or shopping. It could be because they are a supplier or manufacturer of the technology. They might be an employee, whose job depends on a particular technology. It could be because they are a student, or someone in the police or intelligence services. They might be a healthcare professional. Stakeholders can be any group of people , which has an interest in the way computing technology evolves, the impact it has on them and what it can do for them.
The only way to understand how computing technologies have an impact on different groups of people is to constantly read up-to-date articles in newspapers, magazines and blogs, listed to articles on the radio, watch TV programs about technology and to take note carefully of cases your teacher gives you. You cannot be 'taught' everything you need to know for this section. It is about widening your reading and developing your knowledge, experience and understanding.
Illustrations of how technology has impacted on various stakeholders
a.
Communication
Computer systems are more often than not linked together in
networks and the ability to connect with these networks is
something we take for granted now. We can now communicate across
the planet at a speed that was unimaginable only a few years ago.
Using our smartphones, tablets, laptops and personal computers, we
can send and receive data from wherever we are. We can do this
across the Internet or via the phone network using 3g or 4g.
b. Education
The way students learn now has changed beyond recognition. Whole
libraries of information are available via the Internet. The use of
interactive whiteboards, wireless connections, video cameras,
smartphones and tablets, have changed the activities in a classroom
and boards are making increased use of online testing and marking
as well.
c.
Entertainment
Many people play computer games, a form of entertainment that
didn't exist before the mid 1970s. Computer power means that we can
now make and watch 3D films, can carry vast libraries of music and
films around with us on portable devices and can access a whole
range of entertainment via our TVs and portable devices by
streaming films directly to our homes.
d.
Socialising
We now socialise in ways we never used to. Facebook, Twitter,
Dating Agencies, chat rooms, forums and so on are all ways which we
connect to other people. In the past, we used to socialise with
only those people we met whereas now, we can socialise with people
from all over the world.
e. Shopping
We can now shop for any product using the Internet 24 hours a day
all year round. We can use the Internet to find a wider choice of
products from across the globe. We can look up reviews before we
make a purchase and can compare prices easily to save money. We can
get some products such as music, books, films and games delivered
to us instantly electronically.
f. Crime
With the increasing use of computers in our daily lives, it was
inevitable that criminals would also be harnessing the power of
computers. Criminals have hacked into computer networks belonging
to large companies and stolen data, including credit card details.
They have set up false web sites with amazing deals to try and get
people to enter in their credit card details to buy something and
have used 'phishing' techniques (sending out large numbers of
emails) to try and get people to give them their account details
for their bank.
iii. Society
Technology affects the way individuals communicate, learn, and think. It helps society and determines how people interact with each other on a daily basis. Technology plays an important role in society today. It has positive and negative effects on the world and it impacts daily lives. We are living in an era where technological advances are common. The internet and cellphones are some instances. However, with technological advances, there’s a downside to it all.
One aspect of technology that has had a great impact on society is how it affects learning. It’s made learning more interactive and collaborative, this helps people better engage with the material that they are learning and have trouble with. Also, it gets you better access to resources. With the creation of the internet, it gives us access to information at a twenty-four-hour rate and you have access to almost anything online. In addition, it allows students to get work done easier. Students can take quizzes more easily, and teachers being able to hold online classes can be very effective. It also expands the boundaries of the classroom, encouraging self-paced learning. People can access learning through social media. This helps students learn better than sitting down for lectures and reading from textbooks. These technological advancements made learning more fun and convenient.
Another way technology has impacted society is through communication, how we talk and communicate with one another worldwide. Technology brought many new methods of electronic communication. For instance, there are emails, social networking, you can facetime a person that lives on the other side of the world, and here’s video conferencing where you can have conferences electronically. Lastly, the technological advancements that were made within the health industry have helped keep people safe and healthy. There are many innovate apps on phones that although people to watch their weight, how many calories they intake, heart rate and other health properties any time of the day. There’s increased accessibility of treatment available, there’s the change in healthcare that adds benefits for the elderly, and hospitals using advanced technology within their surgical rooms.
However, studies show that mobile communication affects people in a negative way when it comes to being sociable and making face-to-face contact. Mobile technology can decrease communication and relations between people. There’s less personal time, where you find that you don’t enough time for yourself because you’re always in contact with someone. Also, it can be distracting from your schoolwork. There is also loss of privacy, because anyone can find you anywhere, at any time of the day. In conclusion, all of these things impact how humans act today. Without technological advancements, our way of life would not be as complex. Technological influences shape the way humans act today.