As corporate governance climbs up the agenda, IT must be on the board to drive change, says David Smith of Unisys

IT Week: As chief executive of Unisys's research firm, Global Future Forum, do you think IT departments are still under-represented on company boards?

David Smith: There's never been a more important time for IT to be on the board. At the top level of organisations there is not enough understanding of which technology can enable things to get done quicker and cheaper. If boards want to encourage genuinely new ways of doing business, then they have to have IT experts on the board. It should not just be a case of calling IT managers in front of the board when it needs some advice.

Can IT create new ways of operating?

Some propositions are simply better over the computer network. For example, insurance is still bought annually, but why not on a weekly basis where consumers can ramp it up one week and down the next? This is all possible with IT. At the moment IT is not being used to find new ways to do business - it is just being used as a new channel. IT is only the servant of ideas of the company, but ideas would be different if you had business-savvy IT people on the board who could explain how new propositions could be created. I think business needs creativity and IT is the home of creative people. IT thinks out of the box but that's not the case with finance.

Why has corporate governance become a hot issue for IT recently?

Quite simply, people have run out of trust. We have seen too many corporate scandals, overpayment of executives and failure to report accounts. Corporate governance will have an impact because there are a plethora of reports in different parts of the world, all calling for the same thing.

Is corporate governance anything more than a box-ticking exercise for IT?

I can understand why IT teams would think that corporate governance is nothing more than a box-ticking exercise, because that's how it has been approached. One of the biggest areas where you can cook the books is in systems that are not joined up. In such an environment, it's not hard for things to be misrepresented.

What will be expected of IT here?

Corporate governance is a people issue rather than technical issue. IT's main role will be to provide non-executives with their information streams. If everyone is drawing off the same pot, then all figures should be compatible. IT should be able to work for all employees to ensure that there should be no surprises. Managers should be able to look at things in a different way, but still keep a tight rein on what's happening.

What is the role of auditing?

Auditing is one of the healthiest things you can do. It's all about achieving best practice - putting the spotlight on processes and finding a better way of doing things. In any organisation you do what you do because it what you have always done. But that does not necessarily make it the right way of doing things. You do not know until someone tells you whether it's good or bad.

How should companies prepare for new laws on corporate governance?

Chief executives should appoint multidisciplinary teams to look at these recommendations. Just like change-management teams, these groups should be made up of a wide spread of character types: young, old and plodders. Next, the chief executive should get their hands on all the reports, including Cadbury and Turnbull guidelines, and produce a bunch of ideas based on them. They should look at what will make the company more competitive or give it a competitive edge. Firms could make the proposition more attractive by looking at the process as a way of reducing costs or speeding up processes. Firms must ask how these recommendations will serve real needs.

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About David Smith
David Smith is the chief executive of Unisys research company Global Future Forum.

He has held various senior management positions in Unisys, which he joined in 1986.

Smith previously worked for DRG as a marketing director for their business systems division.