The London Stock Exchange (LSE) has developed an online disclosure tool to make it easier for firms to comply with corporate governance rules. Experts said IT directors should use the system as an example of how technology can help compliance programmes.
The LSE said the tool, which will be released next month, was created in response to firms' complaints that they were finding it hard to respond to requests for information about their corporate governance and social responsibility policies.
The LSE's new Corporate Responsibility Exchange system will prompt firms to provide details concerning a wide range of policy areas. This will create a unified resource to which companies can refer requests for information and so avoid duplicated effort. Topics covered include health and safety issues and supplier relationships.
The resource could save firms time and money. Research by the LSE indicates that in a fifth of listed companies, a senior member of staff spends more than half their time gathering data to respond to requests for information on compliance. BT Group estimates that firms spend an average of £25,000 each year responding to such requests. The LSE will charge firms between £800 and £3,000 per year to use the Corporate Responsibility Exchange.
Mike Davis of analyst firm Butler Group said the LSE's system "adds credibility to the argument that compliance should be taken seriously". He added that managers should point to the system as an example of why IT should be central to firms' corporate governance efforts.
Davis argued that IT directors should have a key role in corporate governance and regulatory compliance. "The risk for [IT managers] not taking it up is that it will be taken up by the financial director, who won't have the full scope of their organisation's information systems," he warned.
Ed Farquhar of business intelligence tools vendor Microstrategy said good data management is essential for governance efforts. "Companies have islands of data across departments and systems," he said. "They need to aggregate this data to turn it into a single view that can help them with compliance efforts."
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