Enterprise Systems and Corporate Governance: Parallel and Interconnected Evolution

Abstract

We review the basic information requirements for compliance with the Sarbanes-Oxley Act (SOX) and the OECD’s Principles of Corporate Governance (CG). The fundamental proposition of the paper is that information flow is a critical factor for the CG success or failure and information flow is dependent on the information system that the firm is using. The flaw is not the technology itself but in Enterprise Systems’ design. This analysis reveals that corporate governance principles cannot be implemented without the implementation of modern enterprise systems that can secure disclosure and transparency. Information dissemination and information control are essential to comply with SOX and OECD principles.