Because inadequate information technology (IT) systems can hinder the performance and competitiveness of organizations or expose them to the risk of not complying with legislation, the new ISO/IEC 38500 standard provides broad guidance on the role of top management in relation to the corporate governance of IT.
François Coallier chair of the ISO subcommittee, Software and systems engineering, that developed the standard comments: “Most organizations use IT as a fundamental business tool and few can function without it. IT is also a significant enabler in the future business plans of many organizations. ISO/IEC 38500 will help the governing body to evaluate, direct and monitor the use of IT.
ISO/IEC 38500:2008, Corporate governance of information technology, is applicable to organizations of all sizes, including public and private companies, government entities, and not-for-profit organizations. This standard provides a framework for effective governance of IT to assist those at the highest level of organizations to understand and fulfill their legal, regulatory, and ethical obligations in respect of their organizations’ use of IT.
The framework comprises definitions, principles and a model. It sets out six principles for good corporate governance of IT that express preferred behavior to guide decision making:
- human behavior.
The purpose of the standard is to promote effective, efficient, and acceptable use of IT in all organizations by:
- assuring stakeholders that, if the standard is followed, they can have confidence in the organization’s corporate governance of IT
- informing and guiding directors in governing the use of IT in their organization, and
- providing a basis for objective evaluation of the corporate governance of IT.
Alison Holt, Chair of the IT Governance Working Group comments: “This standard is targeted at the Board of an organization, to assist the Board in delivering the maximum value from IT and information assets across the organization.”
The standard is aligned with the definition of corporate governance that was published as a Report of the Committee on the Financial Aspects of Corporate Governance in 1992, also known as the Cadbury Report. The Cadbury Report provided the foundation definition for the Organization for Economic Cooperation and Development's Principles of Corporate Governance.
ISO/IEC 38500:2008, Corporate governance of information technology was developed by the joint technical committee ISO/IEC JTC1, Information technology, subcommittee SC 7, Software and systems engineering. It costs 84 Swiss francs and is available from ISO national member institutes (see the complete list with contact details) and from ISO Central Secretariat through the ISO Store or by contacting the Marketing & Communication department (see right-hand column).