Business leaders everywhere now recognize information as a strategic asset. Many executives value data governance as a powerful tool that reduces risk and supports data-based decision making. But what is data governance, what does it do, and what day-to-day support does it offer to CEOs?

A company’s digital wealth requires consistent, company-wide information management. Data governance is an umbrella term for the standards and practices that guide how information is managed and used in businesses. It provides a framework, which ensures that important data assets are used consistently throughout the organization. But wait, you say, isn’t information management the CIO’s role? Yes, but inconsistent data management can affect a company’s ability to meet its business goals. That’s when it’s time for a CEO to monitor and guide company-wide data governance policies and practices. Here are some examples of when CEO attention and guidance would be required.

Revenue Takes a Hit

Many decisions are slow or off the mark, and customers are moving to more agile competitors. The cause: your organization has grown too large for traditional data management methods. Whether it’s too many people, storage locations or software packages, your staff can’t get it together to provide timely, consistent data across systems, processes or business units.

Compliance Risk Won’t Go Away

Regulations are more complex, and penalties are stiffer than ever. In other words, compliance risk is high, and it won’t go away. Your legal staff and compliance officers want consistent data handling rules and practices across business units and complex processes.

Poor Data Quality Increases Costs

Your COO reports that operations costs are up. The cause: resource allocation and other decisions are made with inaccurate or out-of-date information. The cost of correcting inaccurate decisions is starting to erode the bottom line.

Siloed Data Affects Decision Making

Your CIO reports that business unit heads are complaining that it’s difficult to make good decisions with incomplete information that’s scattered throughout many locations and storage devices. Intuitive decision making is part of the job, they say, but they don’t want to manage by guessing.

Other Data Management-Related Issues

Sooner or later, these issues will probably come up for CEO scrutiny:

What’s the company-wide status of data governance. Is everyone on board?

Is there a company-wide data management strategy?

How competitive is the company in terms of business intelligence and data governance?

What’s the company-wide cost of poor information quality?

Does the company have the controls to manage internal financial data effectively?

How high is the confidence in the quality of reported data?

Does the company comply with all laws related to data governance?

Does everyone have easy access to the data they need to do their jobs properly?

Knowing, not guessing. That’s the core benefit of data governance for business leaders and decision makers. But how do CEOs in particular benefit by understanding basic data governance ideas?

Data Governance and the CEO’s Role

At the CEO level, data governance is high-level, company-wide data QA. Its biggest value lies in helping executives know what’s really going on and reducing business and compliance risk. CEOs can use data governance principles to:

Set strategy and vision

The CEO’s vision for the company determines where everyone will focus their efforts. But the only way to create a durable strategy is to base it on a firm foundation, in this case, information generated by solid data governance practices.

Use data governance to link business strategy to high-level business goals. Strategies without supporting metrics are vision statements. Creating a clear link between key business decisions and the data that drives them can have a positive effect on company strategy.

Data governance will help you make sure that information you use will be communicated, handled, measured and interpreted consistently throughout your organization.

Build data-centered company culture

Your organization’s culture determines what people do and how business gets done. The term, "data-driven company" has become an awful cliché. But it does highlight the need for decisions based on data that’s accurate, complete and up-to-date. That’s a major function of data governance, along with investment in dashboard software and other technologies that make access to data easier.

Use data governance to make data-based decisions an important part of company culture. Take ownership of your role in data governance and encourage everyone in your organization to do the same. And insist that teams demonstrate the link between data and business outcomes, including how your data affects your KPIs.

Build the Executive Team

Using data governance implies a mandate for company-wide change. To succeed, you’ll need buy-in and enthusiasm across the organization, starting with executive decision makers.

Strategy sets a direction. Data governance provides clear direction, around which the team can rally and achieve business goals. CEO encouragement can go a long way to build a team that expects decisions to be made with reliable data.

Encourage executives to recognize that data governance is not an afterthought and that it deserves ongoing, high-level attention. Expect your team to learn and use its principles -- measurement, consistency, accountability, compliance.

Pave the Way for Growth and Change

Simplifying data collection and reporting processes as much as possible enables an organization to be flexible when dealing with growth and changes, such as mergers, acquisitions or restructuring.

Allocate Capital

One of the most important CEO roles is deciding where the money goes. Data governance assures CEOs that the programs that get the green light are based on consistent terminology, data handling and reporting. In other words, no guessing.

You’ll fund efforts and initiatives that reflect your organization’s priorities and goals. Data governance is an effective way to help you identify your highest-priority initiatives and keep them funded.

When practiced at every level of an organization -- even at the top -- data governance can help CEOs establish and achieve business goals and maintain consistent objectives and policies.

Photo credit: Pressmaster / Shutterstock

Ilan Hertz is head of digital marketing at Sisense, the leader in simplifying business intelligence for complex data. He has close to a decade of experience in applying data-driven methodologies in senior marketing positions in the technology industry.