A comprehensive guide on digital governance

A comprehensive guide on digital governance

Updated: September 26, 2023
8 min read
digital governance
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According to a survey by Ernst & Young, 70% of board directors in the Americas plan to increase technology innovation by 2023. Thus, the importance of corporate governance, and especially its digitalization, seems to be a critical aspect of responsible and modern business operations in the digital economy. 

This comprehensive guide on digital governance delves into what digital governance entails and why it’s important to adhere to essential digital standards. The article explains the nuances of digital transformation and sheds light on how to manage an organization’s digital presence and deliver innovative digital solutions. 

Cultivating a high-performing board

What is digital governance?

Digital governance serves as a structured framework aimed at establishing accountability within the private sector, delineating roles, and delegating the decision-making authority of an organization’s digital presence. 

This framework encompasses various facets such as websites, mobile sites, social channels, the Internet, data ownership, web-enabled products, and digital services that collectively constitute an organization’s digital portfolio.

Implementing a well-crafted digital governance framework minimizes the possibility of lengthy tactical discussions over the nature and control of these digital technologies. Moreover, digital governance management in private sector provides clear guidance on who within your digital team holds decision-making authority for critical areas, including:

  • Digital strategy. It defines the course of an organization’s digital journey.
  • Digital policy. It creates guidelines and regulations governing digital operations.
  • Digital standards. It establishes the benchmark for quality and compliance in digital services and social media platforms. 

The graphic below depicts the major areas of digital governance and management that, rather than being handled independently by distinct departments, should be merged under a single governance framework. 

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The challenge of digital literacy 

Despite the wide range of digital governance tools and digital services available, there remains a significant issue that frequently goes unnoticed. One of them is a lack of digital literacy among board members. McKinsey mentioned that boards of directors frequently lack specific IT knowledge to match IT decisions and frameworks with business goals and strategies.

The DigComp framework established by the European Commission’s Joint Research Centre (JRC) is a digital literacy framework useful for boardrooms. DigComp 2.1 distinguishes 21 linked skills, eight competency levels, and five core components of digital competence: 

  • Information and data literacy
  • Communication and cooperation
  • Digital content production
  • Safety
  • Problem-solving

This digital governance framework serves as a standard for analyzing how effectively board members match the necessary digital skills and competencies. As a result, it leads to a more thorough knowledge of how to measure board effectiveness in the digital era.

Admincontrol states that 94% of worldwide board directors feel they need more training on current technology and governance best practices, while just 58% claim they have received it. The most effective board resolution is to invest in continuing education for current board members, ensuring they have access to practical digital governance example and knowledge. Ideally, this should begin with the development of a matrix of the knowledge and required expertise.

Cybersecurity: a top priority

Data breaches are unfortunately prevalent in almost every business sector, but the financial industry has been hit the hardest. In 2022 alone, there were 566 data breaches in this sector. Furthermore, it is expected that the costs associated with cyber threats will continue to rise, with predictions of $10.5 trillion by 2025.

Today, the board of directors faces new challenges and is in charge of choosing tech-savvy members and implementing data protection measures. In the context of digital transformation, boards of directors must:

  • Create digital governance committees
  • Learn what security features to look for in a technology stack
  • Educate themselves on digital tools, fast-moving technologies, and digital services
  • Implement innovative solutions and policy frameworks
  • Use a completely secure digital services and communication technologies
  • Change management process when needed, i.e. implement board succession planning

Digital governance committees play a key role in enhancing cybersecurity. They are made up of cybersecurity experts who promote accountability and informed decision-making. Responsibilities of the digital governance committee include:

  1. Addressing data breach scenarios
  2. Creating new response strategies to real risks
  3. Strengthening cybersecurity measures
  4. Promoting digital transformation within the company
  5. Mitigating negative consequences 

One of the most pressing issues in digital governance involves navigating the ever-changing world of complicated legislation. Staying up to date on the newest legal protections is critical as businesses implement digital transformation, digital tools, and technologies. 

The General Data Protection Regulation (GDPR) in the European Union and the California Consumer Privacy Act (CCPA) in California are two important pieces of legislation. They both highlight the complex web of rules on digital platforms that affect digital corporate governance. The infographic below explains the differences between the GDPR and CCPA frameworks.

Navigating complex regulations

Additionally, these legal safeguards connect with the larger landscape of ESG compliance. In this case, comprehensive corporate governance goes far beyond just the responsibilities of the company administration. In turn, corporate secretary duties include guaranteeing compliance and advocating for ethical business behavior under ESG principles.

In conclusion, maintaining compliance with these laws demands ongoing monitoring and access to dependable resources. Government oversight, strategic alliances with compliance professionals, and civil society in participation often offer useful information. Additionally, organizations mitigate the associated costs and potential negative consequences of non-compliance by establishing accountability within their governance structure.

Accountability and liability

Failing to address responsibility and liability concerns can have significant legal and reputational repercussions. The collapse of Carillion, for example, illustrated the potential accountability and liabilities that board members may encounter due to governance deficiencies. This instance was attributed, in part, to insufficient governance and risk management measures. 

In order to prevent problems, it is important to establish appropriate measures for accountability within the board. Here are some useful best practices:

  1. Clarify roles and responsibilities. Make sure each board member understands their specific responsibilities in relation to digital governance. This allows for clear accountability lines.
  2. Provide ongoing training and education. Keep board members informed about the latest digital trends and security threats through ongoing training programs.
  3. Conduct regular audits and compliance oversight. Regular audits should be conducted to ensure compliance with digital governance policies and regulations. This proactive approach can help identify and address potential issues.
  4. Develop strong cyber security protocols. Establish comprehensive cybersecurity protocols and ensure that they are strictly followed. Cybersecurity should be a concern for the entire board, not just the IT department.
  5. Create crisis response plans. Have detailed plans in place to respond quickly and effectively to potential breaches or incidents, minimizing damage to the reputation of the organization.

Crafting a digital governance strategy

In today’s corporate context, digital governance strategy is crucial to decision-making processes. This strategy is the foundation that allows businesses to make educated and strategic decisions. 

Companies across every sector of the economy continue to prioritize digital transformation. According to the EY Digital Investment Index study, 9% of the 1,000+ respondents were identified as “digital leaders.” These leaders saw a six percentage point higher return on their digital investments and reported stronger revenue growth. 

There are three phases to enhancing your digital governance strategy.

1. Strategic investment and collaboration

Organizations should strategically deploy their digital investments, taking into account whether to buy, build, or collaborate, and avoid siloed methods. To ensure consistency with company objectives and optimize the value of digital efforts, take into account collaboration incentives and oversight bodies.

2. Scalable deployment and rapid response

By concentrating on the scalable deployment of digital solutions, organizations improve their digital governance strategy. For instance, using a digital platform for tracking customer satisfaction and user behavior is an illustration of how quickly concerns may be identified and used for further product improvement. 

3. Clear governance and metrics

It is critical to have clear governance procedures, responsible leadership, and effective metrics connected to the digital strategy. A strong digital governance framework is built by regularly examining the use case portfolio, focusing on strategic solutions. Additionally, it includes upgrading skills and tools for measuring financial effects.

Digital governance best practices

In 2021, 81% of businesses used digital transformation to improve their operations. Technology breakthroughs, such as artificial intelligence, open data, and other digital tools, are constantly reshaping the company environment and different stakeholders. 

During the pandemic, 85% of CEOs started digital transformation activities. However, most companies still don’t have a clear and unified strategy for integrating various technologies like AI, blockchain, machine learning, 5G, virtual reality, and cloud. To effectively navigate the complexities of today’s digital world, board members need to establish a strong education basis and constant learning.

Please familiarize yourself with the foundations of good digital governance by using the graphic below, which provides a representation of digital governance best practices.

Digital governance best practices

To keep in touch with the latest industry developments related to digital governance strategy, consider using the following resources:

  • Online courses and webinars
  • Digital platforms like Coursera, edX, and LinkedIn Learning offer a wide range of courses on digital technologies, governance, and related topics.
  • Industry reports and journals
  • Explore reports and publications from organizations like Gartner, Forrester, and McKinsey for in-depth insights into digital governance trends.
  • Professional Associations

The role of board portals in digital governance

Boards of directors today devote more time to their tasks and handle a broader variety of concerns than ever before. With rising workloads on boards, they should become more efficient. Thus, the digitalization of the board of directors is an important step toward effective and sustainable governance.

Hence, including the iDeals Board in your digital governance has many benefits, including:

  1. Effective asynchronous cooperation among board members 
  2. A flexible, safe, and compliant work environment 
  3. Meetings, agendas, and meeting minutes creation
  4. Task and action planning 
  5. Centralized access to information

Key takeaways

Here are several key takeaways highlighting the significance of digital governance:

  1. In today’s corporate context, digital governance is becoming increasingly important. A significant proportion of board directors are strongly stepping up efforts to accelerate technological innovation by 2023.
  2. Addressing difficulties in digital governance, such as GDPR and CCPA compliance, necessitates proactive approaches. Ensuring digital literacy among board members and employing frameworks such as DigComp are critical steps in successfully navigating the complicated digital world.
  3. Accessing numerous materials helps board members improve their grasp of digital governance. Online courses, industry documents, and professional groups provide excellent possibilities for ongoing learning and staying current on digital governance developments and best practices.

As a board member seeking to improve your understanding of digital governance, explore online courses and webinars from digital platforms like Coursera, edX, and LinkedIn Learning. You can also gain in-depth insights into digital governance developments by reading industry studies and journals from Gartner, Forrester, and McKinsey.

Keep with the iDeals Board blog to learn more about digital governance in the upcoming articles.


Can digital governance align with a company's strategic goals?

Yes. And moreover, by aligning digital operations and investments with strategic goals and establishing clear decision-making procedures, a company’s digital governance can support overall business objectives.

What are digital governance best practices?

Best practices in digital governance include defining roles and duties for digital decision-makers, implementing data privacy and security standards, routinely updating digital rules, and developing an accountability and transparency culture.

How can board members improve their digital literacy?

Members of the board may increase their digital literacy by participating in appropriate training programs, getting up to date on industry trends and digital tools, receiving advice from digital specialists, and actively participating in the company’s digital strategy and efforts.

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