Enhancing corporate governance with efficient data management

Vaidotas Sedys at Oxylabs explains how robust data governance not only ensures compliance with regulations, but also fosters transparency, enables informed decision-making, and ultimately drives growth

In the current business landscape, corporate governance and data governance are closely interconnected. One cannot function without the other. The increasing trend of using data-driven decision-making has made it crucial for companies to be transparent and efficient in the way they collect and manage their data.

By collecting, processing, and securing data in a responsible and ethical manner, companies can build trust with stakeholders, improve decision-making effectiveness, and ultimately drive growth. Therefore, data governance is becoming a crucial part of corporate governance, and companies will have to make significant investments in it to succeed in today’s digital economy.

Understanding data governance

To understand the connection between data governance and corporate governance, we first need to understand what data governance is. Simply put, data governance refers to the set of policies, processes, and standards that are in place to ensure data is collected, managed, protected, and used effectively within an organisation. It includes quality, security, privacy, compliance, and other important elements of data management throughout its lifecycle.

Data governance involves policies, procedures, and guidelines for proper collection, storage, use, and sharing of data. If implemented well, it ensures data accuracy, consistency, and reliability. Data governance also establishes roles and responsibilities for data management and implements tools and technologies to support these activities.

Data governance is crucial for organisations to comply with the regulations and laws governing data collection and use, such as the General Data Protection Regulation (GDPR), HIPAA, and others. Compliance with these regulations protects organisations from legal and financial penalties, protects their reputation from damage and, most importantly, ensures safety and security for their customers.

Implementing appropriate security measures is crucial to prevent unauthorised access, misuse, or theft of sensitive information. Access controls, encryption, and monitoring are vital measures organisations can take to reduce the risk and consequences of data breaches. By implementing these procedures, businesses can ensure that only authorised individuals access sensitive information.

Enhancing transparency through data governance

Transparency is a fundamental aspect of corporate governance. It enhances trust among stakeholders, including investors, customers, and employees. Data governance plays a crucial role in promoting transparency in several ways.

Accurate and timely financial reporting is a crucial element of business transparency. Effective data governance is required to ensure consistency, reliability, and compliance with accounting standards. Boards of directors rely on data-driven insights to make informed decisions.

Therefore, it is essential to have an efficient data governance process in place that provides board members with timely, relevant, and accurate information. This leads to better governance and strategic planning.

Companies must establish clear and detailed data policies that explain their handling of user data in plain language. Companies must also inform users about data collection, storage, and sharing and provide a transparent opt-in and opt-out process for data collection.

Businesses that handle massive amounts of customer data should appoint a data protection officer to ensure compliance with data protection laws and act as a point of contact for users. Regular training for employees on data ethics and security is critical as well.

Companies must proactively inform users of any data breaches or changes in policy. Above all, building a culture of transparency and responsibility is essential.

There are several good examples of companies that are transparent in how they manage user data. For instance, Google and Apple publish annual transparency reports. Similarly, Microsoft has set up privacy dashboards to give users more control over their data.

At least in the EU, GDPR has pushed companies to be more transparent with cookie consent banners and clear data usage policies. These measures help users understand how their data is managed and build trust.

Boards must understand data technology

The data industry is constantly changing, so it’s essential for any data-driven business to understand the latest tech advancements and potential opportunities, as well as the obstacles and risks in a particular sector. They must also know the governance issues surrounding new data technologies, like regulatory challenges and pitfalls.

By following the best data governance practices, organisations can inspire trust among their teams and stakeholders, successfully implement new tech initiatives, and enhance their competitiveness and sustainability.

Vaidotas Sedys is Head of Risk Management at Oxylabs 

Main image courtesy of iStockPhoto.com and Khanchit Khirisutchalual