Frameworks and Best Practices for IT Governance

-- Ravi Kumar Jain B

IT governance has emerged as the basic tool for assessing and evaluating decisions on organizational IT initiatives. Almost every organization with reasonably large IT investments has either implemented or is exploring the possibilities of implementing IT governance in order to extract maximum value out of every dollar spent on their IT resources. Organizations assess their present and future IT requirements and develop a suitable model/framework to initiate IT governance activities at their place. However, several organizations fail to identify an appropriate IT governance framework matching their organizational needs. Several models and frameworks are available today, developed based on international standards, like ITIL, COBIT, ISO, SAS and Six Sigma (Craig Symons, 2005). This paper discusses the main objectives of IT governance and elaborates on the best of available and widely used industry standards in structuring IT governance framework.

© 2007 IUP . All Rights Reserved.

Role and Functioning of Remuneration Committee in Improving Corporate Governance

-- M S Narasimhan and Manju Jaiswall

This paper examines role of remuneration committee in the pay-setting process under different ownership structures. The survey results show that the members of the remuneration committee see a positive role in the pay-setting process, and thereby, improve corporate governance. The empirical analysis highlights the role of remuneration committee in the pay-setting process in firms, where family members do not hold the top management position and have a positive impact on the performance. In family-owned and controlled firms, the remuneration committee has a limited role to play on both, pay-setting process and impacting performance through top management pay. Remuneration committee, thus, plays an important role in mitigating agency problem, which is expected to be high when family ownership is low or non-family members hold key positions.

© 2007 IUP . All Rights Reserved.

Does Board Size Really Matter? Ancient Indian and Modern Views

-- C Chendroyaperumal

Recently various scholars have investigated the relationship of the size and structure of the board with the corporate performance in different countries and industries and found them inconclusive. This paper is an attempt to highlight the relationship of the size and structure of the board on performance, and thus on governance, which was of concern to the Indian scholars way back around 300 BC. Their guidelines for deciding the board size and composition is very much relevant even today.

© 2007 IUP . All Rights Reserved.

The Impact of Ownership and Board Governance on Firm-level Entrepreneurship in Small Technology-based Firms

-- Jonas Gabrielsson and Diamanto Politis

A growing body of research suggests that a firm's governance system can significantly impact the long-term value creative potential of an enterprise by disciplining and encouraging organizational efforts to pursue risky entrepreneurial projects. Following this stream of research, this study presents the impact of ownership and board governance on entrepreneurship in small technology-based firms. Entrepreneurship was measured by the firms' emphasis to take an Entrepreneurial Posture (EP), encompassing a risk-taking, innovative and proactive competitive orientation. Statistical analysis on a sample of 135 small technology-based firms shows that the level of executive ownership has no significant effect on the emphasis on EP. However, controlling for the level of ownership held by the founder of the firm reveals a significant and negative influence on the firms' commitment to EP. With respect to board governance, the view that a higher board involvement in networking activities by board members encourage EP efforts is supported, while there is no significant effect of higher board monitoring. In all, the findings give ample support for the argument that variations in ownership and board governance have a significant influence on the entrepreneurial strategic posture of small technology-based firms.

© 2007 IUP . All Rights Reserved.

Disclosing Corporate Commitment to Stakeholders: From Corporate Governance Reports to Sustainability Reports

-- Romina Mathew

As businesses come to be recognized as corporate citizens, expectation in terms of the organizations' contribution towards sustainable development is also on the rise. Not satisfied with the traditional indicators of financial performance, stakeholders demand a transparent, and accountable view of the organization's performance, and how it impacts not just the economic parameters, but also the social and environmental aspects. Sustainability reporting which gives a holistic perspective of the organization's initiatives and depicts its commitment to stakeholders, is a concept gaining ground. With a host of agencies, codes, practices and principles, a framework is still emerging, which promises to be rewarding for the companies adopting it, but the companies first need to thrash out the challenges and most important of all have a willingness and commitment to disclose voluntarily.

© 2007 IUP . All Rights Reserved.