Director Essentials: Data Governance and Oversight

Why it Matters: It is estimated that the total number of Internet users worldwide reached 5.18 billion in 2023. Looking ahead, it is estimated that there will be nearly 30 billion Internet of Things (IoT) devices by 2030. Pair the proliferation of data created by human use of the Internet with data generated by IoT devices, and the volume and velocity of growth of data is staggering—and presents significant potential and risks to organizations of all kinds. For example, recent research estimates that by 2030, the data monetization market will be worth $11.83 billion.

But before companies can leverage their data to achieve strategic goals, they must first govern it. As data proliferates exponentially, so too do tools capable of creating value from it: artificial intelligence (AI) applications, predicative analytics, and machine learning, among others. Data governance helps organizations know what data they have, where it is located, how it is being used to create value, and whether it is being used within the bounds of regulations and the organization’s values.

Data are no longer simply things to be managed, protected, and siloed off within the company. Gone is the notion of thinking about data solely through the lens of privacy, cybersecurity, or information technology. Rather, data is now a core business asset that has the potential to create or destroy value when paired with transformative technologies like artificial intelligence. As this creative and destructive potential grows, so too does the importance of robust data governance.

This new reality requires boards to oversee the company’s data governance program. Boards can strengthen their organization’s data governance and ensure its alignment with strategic objectives and value creation by asking the right questions and elevating the importance of sound data practices. This Director Essentials explains data governance and sets out the core focus areas for board oversight to ensure that organizations effectively and ethically derive sustainable value from data assets.