This paper reviews Information Systems (IS) literature that is relevant to Information Technology Governance (ITG) and examines how it informs Accounting Information Systems (AIS). We present a taxonomy of research encompassing the focus areas identified by the IT Governance Institute (ITGI), namely Strategic Alignment (SA), Risk Management (RK), Resource Management (RM), Value Delivery (VD) and Performance Measurement (PM). Based upon 496 papers in ten IS/AIS and two Management Accounting journals over the period 1998–2008, we discuss research perspectives and identify avenues for future research. Results revealed a lack of integration between focus areas, with little about ITG as a whole.

A Review of IT Governance: A Taxonomy to Inform Accounting Information Systems

Executive Overview Agency theory addresses problems created from the separation of principals and agents in modern corporations. Some agency theorists have investigated the exact relationship between control mechanisms (monitoring and bonding) and suggested that they work as substitutes. We posit that, although monitoring and bonding may be concurrent substitutes in a system of governance, monitoring intensity is positively related to bonding (i.e., compensation) so that over time, they are complements rather than substitutes. In particular, we suggest that increased monitoring intensity shifts risk to managers, who then require greater compensation to offset their increased employment and career risk. Accordingly, they reinforce each other in a negative cycle such that monitoring leads to increased pay, which in turn leads to increased monitoring due to complaints of excessive pay. The result is that in today's economic environment society often criticizes executive pay without realizing that, in part, h...

Complementarity in Monitoring and Bonding: More Intense Monitoring Leads to Higher Executive Compensation

While research has produced valuable insights about digital innovation, we lack a comprehensive understanding about its core nature, and research across disciplinary boundaries lacks integration. To address these issues, we review 227 articles on digital innovation across eight disciplines. Based on our findings, we (1) inductively develop a new definition and propose a new framing of current conceptualizations of digital innovation, (2) organize central concepts of the literature on digital phenomena and show how they intersect with our conceptualization, and (3) develop a framework to organize digital innovation research according to five key themes. We conclude by identifying two particularly promising areas of future research.

Digital innovation : Review and novel perspective

Using an information processing perspective we identify two reasons why boards failed to manage risk well 1) board members did not get relevant information about risks incurred by management because they lacked control over information supply; 2) board members were not able to process such risk-related information and lacked incentives or power to influence managerial decision making. Based on insights from cybernetics and decision making theory, we suggest increasing the information processing and decision making capabilities on the board level, by including multiple stakeholders on multiple boards based on a division of labor and a division of power; this alternative structure we label network governance.This paper is one of the few papers making actual recommendations based on systemic insight. Practitioners that agree with the analysis will be able to draw conclusions for their proper governance structure, especially when their businesses operate in increasingly complex environments. Regulators could equally learn from those recommendations and include basic insights generated in their regulatory frameworks.

Corporate Governance, Risk Management, and the Financial Crisis - An Information Processing View

Manuscript Type: Perspective

Research Question/Issue: What were the reasons for poor risk management on the board level before and during the financial crisis? Were there systemic information processing problems that an alternative board design could alleviate?

Research Findings/Insights: Using an information processing perspective, we identify two reasons for boards failing to manage risk well during the financial crisis: (1) board members did not have access to relevant information on the risks management incurred because they had no control over information supply; and (2) board members were unable to process the available risk-related information, and lacked incentives or power to influence managerial decision making. Based on insights from cybernetics and decision making theory, we suggest increasing board level information processing and decision making capabilities by including multiple boards for different stakeholders to create a division of power and labor. We label this alternative structure network governance and posit that it allows superior risk management.

Theoretical/Academic Implications: The paper illustrates that the unitary board structure's systemic shortcomings increase the likelihood of poor risk management at the board level. The solutions proposed are an important theoretical advancement of the discussion on ongoing board failure in increasingly complex business environments.

Practitioner/Policy Implications: This paper is one of few providing actual recommendations based on a systemic insight. Enlightened shareholders and/or managers could introduce network governance by amending corporate constitutions. Regulators should require firms considered too big to fail to adopt network governance or pay the cost for regulators establishing a risk-monitoring unit in each firm.

Corporate Governance, Risk Management, and the Financial Crisis: An Information Processing View

The nominally independent board of directors is in fact often dependent on management for information. But new pressures on companies, more cooperative approaches and new technologies can render directors increasingly effective as evaluators and advisers.

How boards can be better: a manifesto

This publication contains reprint articles for which IEEE does not hold copyright. Full text is not available on IEEE Xplore for these articles.

How boards can be more effective - a manifesto

The better business experimenters have cultivated an unusual way of adapting to their demonstrably limited powers of perspective: They're humbled. Data from experiments should ideally encourage executive curiosity and humility. Unfortunately, that rarely happens. Too many executives worldwide would rather use their expertise to think or intuit what's best for their customers than run even the simplest experiment. They take pride in their gut. That's a huge managerial mistake. Organizations may be confident they know their customers, but they're very likely to be overconfident. Most executives aren't nearly as smart, perceptive or customer-centric as they believe. In today's digital economy, presumptuousness is for losers. The simple truth is that, on average, testable hypotheses and simple experiments that reveal customer preferences are smarter investments in customer insight than intuitions and ideas

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How boards can be better: a manifesto

How boards can be more effective - a manifesto

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