Information governance

What Is Information Governance?

Information governance is a comprehensive framework encompassing the policies, procedures, and controls an organization implements to manage its information assets effectively. It falls under the broader financial category of Risk management and aims to optimize the value of information while mitigating risks associated with its creation, use, storage, and disposal. Unlike simpler approaches to data handling, information governance provides a structured methodology to ensure that information is accurate, accessible, and compliant with relevant laws and regulations throughout its information lifecycle. This includes managing both structured data, found in databases, and unstructured data, such as emails, documents, and multimedia. A robust information governance program integrates various organizational functions, promoting a unified approach to data management and protecting sensitive data.

History and Origin

The concept of information governance evolved from earlier practices like records management and data administration, driven by increasing regulatory scrutiny, the proliferation of digital information, and the growing importance of data as a strategic asset. As organizations began generating vast amounts of electronic data, the need for systematic control over this information became paramount. Early efforts focused on ensuring record retention for legal and evidentiary purposes.

A significant driver for the formalization of information governance was the rise of global data privacy concerns and stricter regulatory frameworks. For instance, the Organisation for Economic Co-operation and Development (OECD) published its "Guidelines on the Protection of Privacy and Transborder Flows of Personal Data" in 1980, setting foundational international principles for data handling and privacy, which laid groundwork for future information governance principles related to data privacy.⁴ This growing focus on privacy and accountability underscored the necessity for organizations to have well-defined policies for how information is collected, stored, and used.

Key Takeaways

• Information governance establishes policies and procedures for managing an organization's information assets from creation to disposal.
• Its primary goals are to enhance information value, ensure regulatory compliance, and reduce information-related risks.
• Effective information governance integrates legal, IT, security, and business operations for holistic data management.
• It addresses various aspects including data quality, security, privacy, accessibility, and retention.
• A strong information governance framework helps organizations avoid legal penalties, improve operational efficiency, and make better business decisions.

Interpreting Information Governance

Information governance is interpreted and applied through the creation and enforcement of organizational policies that dictate how information is handled. This involves defining roles and responsibilities, establishing standards for data quality, and implementing technologies that support governance objectives. For instance, in a financial context, information governance would guide how transaction data is captured, stored, and secured to ensure its integrity and availability for regulatory reporting and audit trails. The interpretation of information governance is highly context-dependent, varying based on the industry, regulatory environment, and the specific information assets an organization possesses. Its effectiveness is measured by the organization's ability to maintain data accuracy, meet legal obligations, and protect against information-related risks such as data breaches or non-compliance.

Hypothetical Example

Consider a multinational investment firm, "Global Assets Inc." To ensure robust information governance, the firm implements a new policy for all client communications. The policy mandates that all emails, instant messages, and call recordings related to client transactions must be automatically archived on secure, unalterable servers for a minimum of seven years. Furthermore, access to these archives is restricted to authorized personnel, and all access attempts are logged for auditing purposes.

For example, when a client, Ms. Chen, sends an email to her financial advisor requesting to liquidate a portion of her portfolio, this email is immediately captured and indexed by the firm's information governance system. Even if the advisor later deletes the email from their inbox, the system retains a copy. This adherence to information governance ensures that Global Assets Inc. maintains a complete and accurate record of client instructions, which is critical for dispute resolution and demonstrating compliance with financial regulations.

Practical Applications

Information governance is critical across various sectors, particularly within financial institutions, due to stringent regulatory requirements and the sensitivity of financial data.

• Regulatory Compliance: Financial firms must adhere to regulations such as the Sarbanes-Oxley Act (SOX), the General Data Protection Regulation (GDPR), and specific Securities and Exchange Commission (SEC) rules. For example, SEC Rule 17a-4 mandates that broker-dealers retain records for specific periods in a non-rewriteable, non-erasable format, directly impacting how electronic records are managed and preserved.³ This ensures that records are readily accessible for regulatory examinations. The Financial Conduct Authority (FCA) recently fined Barclays £42 million for shortcomings in its financial crime risk management, citing failures to gather sufficient information and manage money laundering risks when dealing with clients, highlighting the severe consequences of inadequate information governance.
  ¹, ²* Cybersecurity and Data Security: Information governance defines policies for protecting sensitive data from unauthorized access, loss, or corruption. Frameworks like the NIST Cybersecurity Framework provide guidelines for identifying, protecting, detecting, responding to, and recovering from cybersecurity incidents, which are integral to information governance efforts.
• Litigation and E-Discovery: Proper information governance ensures that organizations can efficiently identify, preserve, and retrieve relevant information for legal proceedings, reducing costs and risks associated with discovery.
• Operational Efficiency: By standardizing how information is managed, organizations can reduce duplication, improve searchability, and enhance data usability, leading to more efficient operations and better decision-making.

Limitations and Criticisms

Despite its benefits, implementing comprehensive information governance can present challenges. One significant limitation is the cost and complexity involved. Establishing and maintaining a robust information governance framework requires substantial investment in technology, personnel, and training. This can be particularly burdensome for smaller organizations with limited resources.

Another criticism revolves around the potential for over-governance, where overly strict or complex policies can hinder business operations and innovation. If information governance rules are too rigid, they might impede the free flow of information necessary for collaboration or agile decision-making, potentially leading to inefficiencies rather than improvements. Furthermore, ensuring consistent adoption and adherence across a large organization can be difficult, as it often requires a significant cultural shift and ongoing enforcement.

The rapidly evolving landscape of data types, storage technologies (like cloud computing), and global legal obligations also poses a continuous challenge. Information governance frameworks must be flexible enough to adapt to these changes without becoming obsolete or ineffective. Failure to keep pace can leave organizations vulnerable to new risks or non-compliance.

Information Governance vs. Data Governance

While often used interchangeably or seen as closely related, information governance and data governance have distinct focuses.

• Information Governance: This is a broader discipline that encompasses all information assets, regardless of their format (structured or unstructured data). Its primary concern is the value, risk, and cost of information throughout its entire lifecycle, focusing on legal, regulatory, and business needs. Information governance answers questions like "What information do we have?", "Where is it located?", "Who owns it?", "How long do we keep it?", and "Is it compliant and secure?". It includes aspects such as records management, e-discovery, corporate governance, and overall information strategy.
• Data Governance: This is a subset of information governance, specifically focused on the management of data assets, primarily structured data. Its objective is to ensure the quality, usability, integrity, and security of data within an organization. Data governance focuses on aspects like data definitions, data lineage, data stewardship, and master data management. It answers questions like "Is our data accurate?", "Is it consistent across systems?", and "Can we trust it for analytics?".

In essence, information governance provides the overarching strategic framework for managing all information, while data governance provides the operational framework for managing the quality and integrity of specific data sets.

FAQs

What is the primary goal of information governance?

The primary goal of information governance is to optimize the value of an organization's information while minimizing the risks and costs associated with its management. This involves ensuring that information is accurate, secure, compliant with regulations, and readily available for business needs.

How does information governance affect regulatory compliance?

Information governance is crucial for regulatory compliance by establishing policies for recordkeeping, data privacy, and data security. It helps organizations meet legal and industry-specific requirements, such as those related to financial reporting or customer data protection, thereby reducing the risk of fines and legal penalties.

What are the key components of an information governance framework?

A comprehensive information governance framework typically includes policies for data classification, data retention and disposal, data security, privacy, and auditing. It also defines roles and responsibilities for information stewardship and incorporates technology solutions to automate and enforce these policies.

Is information governance only for large companies?

No, while often associated with large enterprises due to complex regulatory environments, information governance principles are applicable and beneficial for organizations of all sizes. Even small businesses can benefit from structured approaches to managing their information assets, particularly concerning client data protection and operational efficiency.

How does information governance relate to cybersecurity?

Information governance sets the strategic policies and rules for how information should be protected, while cybersecurity provides the technical means and practices to achieve that protection. Information governance dictates what needs to be secured, and cybersecurity implements the safeguards.