The Open Data Institute's Stuart Coleman writes about the growing importance of data governance for company directors.
Please note, this content is not produced by the IoD and therefore does not necessarily represent the views or thoughts of the organisation.
This year has been a testing time for business, with the impact of coronavirus challenging even the most resilient organisations. One consequence of the pandemic has been a rapid shift to remote working, an increased reliance on digital solutions, and consequently the need for a robust data infrastructure to enable businesses to securely access company and customer information and keep trading.
As companies strive for recovery, data will play a vital role. The ability to manage and leverage data efficiently can provide businesses with information to help guide them out of the crisis and build resilience - fostering innovation, optimising supply chains, improving market reach and solving sector challenges.
Understanding data governance is a non-negotiable part of a director’s responsibilities and failure to do so can have serious consequences, including heavy fines, legal action, compensation claims and considerable reputational damage.
The Facebook/Cambridge Analytica scandal is one of the most prominent examples of data mismanagement harming a company’s reputation, but there are many others. British Airways was recently fined £20 million over a 2018 cyber attack which compromised the personal details of 400,000 customers. The Sage data breach resulted in a steep fall in company shares, and Google was forced to shut down the Google+ social network after discovering, but not immediately disclosing, a bug that could have exposed the private data of half a million users.
We recently hosted a podcast as part of our ODI Inside Business series, to discuss whether senior leaders were sufficiently aware of their data stewardship responsibilities and whether they had the necessary skills and knowledge to ensure their organisations were managing data correctly.
Faisal Khan, chair of Institute of Directors (IoD) South, Olivia Hawkins, consulting director, Wunderman Thompson Data, and Richard Young, Industry and Regulatory Affairs – Global Data, Bloomberg LP were on the panel. In the podcast, Faisal Khan acknowledged that data responsibilities were a challenge for directors, who have to keep up with an incredibly fast-paced technological environment, generating massive amounts of data.
Larger organisations, especially in industries such as financial services, are usually cognisant of data regulations and the benefits of using and sharing data effectively, and many will have Chief Data Officers to fulfil this role. However, smaller companies – and 80% of UK businesses are SMEs – are less likely to be able to afford to employ a full-time expert. They may hire consultants to assist with specific issues, for example ensuring GDPR compliance when legislation was enforced in 2018. But this approach, motivated by fear of regulation rather than a need to encompass strategic goals, is no substitute for an overall framework that embeds data strategies into all areas of company activity.
This does not mean that directors need to become technical experts, as Richard Young pointed out, but it is essential that they know how to put together systems to ensure data is collected, stored, and used properly to drive positive outcomes while maintaining ethical standards and adhering to regulations. Olivia Hawkins added that being trusted with data is incredibly important for a company. However, directors’ responsibilities are not just about security but also about understanding how data can be harnessed to achieve business goals while behaving ethically and responsibly.
With the Covid pandemic continuing to shake up traditional business models, it’s all the more crucial that directors embrace the principles of good data governance.
The ODI Inside Business is a series of podcasts, webinars and guides to help business leaders and their teams get to grips with data.
Stuart Coleman is passionate about the opportunities for people to use technology, data and machines to learn new skills and shape a better future. He has diverse entrepreneurial and executive leadership experience in venture-backed, publicly listed and mission-led high growth technology, training and consulting organisations. He raised venture funding as well as built several businesses from cashflow. He has been founding Commercial Director at the Open Data Institute in 2012 and is delighted to have returned to support the leadership and team amidst an exciting new phase of growth in 2020.