Corporate Governance and IT GovernanceAccording to Spafford (2003), governance addresses the proper management of organizations whilst IT governance takes these concepts one step lower and applies them to the IT group. Spafford (2003) further says that perhaps the best definition can be found in the executive summary of COBIT, which identifies IT governance as "a structure of relationships and processes to direct and control the enterprise in order to achieve the enterprise's goals by adding value while balancing risk versus return over IT and its processes." Corporate governance issues cannot be addressed without considering IT Governance issues. (Van Grembergen, De Haes & Guldentops, 2004:6).
There are several ways of looking at the connection between corporate governance and IT governance. Weil and Ross (2004:5) have created a framework for linking the corporate governance and IT governance principles together which can be seen in figure 1. The areas that relate to IT governance are marked in grey.
Figure 1. Framework linking corporate governance to IT governance.
Another is described by Shleifer and Vishny (1997). They mention three key questions that they say management team should address to display the connectivity between corporate governance and IT governance.
Corporate Governance questionsIT Governance questionsHow do suppliers of finance get managers to return some of the profits to them?How does top management get their CIO and IT organisation to return some business value to them?How do suppliers of finance make sure that managers do not steal the capital they supply or invest it in bad projects?How does top management make sure that their CIO and IT organisations do not steal the capital they supply or invest in bad projects?How do suppliers of finance control managers?How does top management control their CIO and IT organisation?This paper uses the King Report as a base for compliance, because it...