Free Newsletters  


In This Edition

Success in Outsourcing

CIOs share business rules that work.

Ethical Outsourcing

You are still responsible for how operations are run.

Using Analytics for Competitive Advantage

There’s a right and a wrong way to use them.

How to Do Customer Segmentation Right

By courting specific customer segments, RBC Royal Bank has grown its market share.

The 6 Keys to Business Alignment

Lasting value for your business partners.

Rules for IT

Three CIOs have created rules for their staffs to follow.

Disposing of Hard Assets

Getting rid of your old computers is more complicated than you might think.

The Looming Security Crisis

Ed Lazowska, of the President’s Information Technology Advisory Committee, says the government, vendors and CIOs aren’t doing enough.

KEYNOTE

Outsource, Don't Abdicate

Regardless of what business processes you move outside your corporate borders, you can’t lose sight of your ultimate responsibility for ethics and the end result.
BY BEN GOMES-CASSERES


Advertisers


My favorite post-Enron cartoon, by Dan Wasserman, has two captains of industry discussing what to do about the fallout from corporate scandals. "We are seen as ethical disasters," says one of them. "How are we going to rebuild public trust?" In a flash of brilliance, the other answers: "We could outsource it!"

Behind the sarcasm there lies an interesting question: When a company sheds operations through outsourcing, does it also shed its responsibility—ethical and otherwise—for how those operations are run? Companies today rely more and more on partnerships with third parties for everything ranging from supplies and manufacturing to product design and distribution. In this so-called extended enterprise, where does management's responsibility for good governance begin and end?

Lawyers and accountants will surely have an answer (or several) to this question, based on their reading of Sarbanes-Oxley and other regulations. But top management's answer should go beyond current laws and professional practices, as the question also relates to performance, reputation and, yes, even ethics.

Corporate governance, writ large, means how and to what ends top management exercises its authority and influence. But authority over what? The financial statements of a company begin and end at the legal boundaries of the company's property. What it owns or controls is included; what it doesn't, is not. The problem is that partnerships and outsourcing often fall in a gray zone—they are not usually owned or controlled by the company, but they can be critical to its economic performance.

In effect, the economic boundaries of the company stretch well beyond the legal boundaries. And it is this broader economic scope of operations that companies should govern well, not just the legally defined core. Those who don't, risk suffering penalties—perhaps not legal penalties, but penalties no less in their performance, their brand reputation, or in the public's perception of their ethical integrity. A few examples will illustrate what I mean.

1 | 2 | 3 | next page »

 
  Voice Your Opinion (All fields are required)
  Subject:
Comments:
First Name:
Last Name:
Title:
Organization:
E-mail:
Anonymous post? Yes No

Anonymous posts will not display any personal information, but you must include your full real name and e-mail to post; unsigned submissions are deleted.

CIO.com Comment Policy

Related...

Articles

Outsourcing

More on Outsourcing...

White Papers

Free Newsletters

CIO Enterprise
Strategy how-to

CIO ERP
Enterprise Resource Plan

CIO SOA
Service Oriented Architecture

Third Pary Offers
I agree to receive e-mail communications from third parties, such as product and service offerings, that are approved by the editor and publisher of CIO.

E-mail address:


© 2005 CXO Media Inc.


Dated: October 01, 2005
http://www.cio.com/archive/100105/keynote.html

Ads by TechWordsSee Your Link Here

SPONSORED LINKS:
IDG Research Report Reveals CIO Visibility Blind Spot for Application Development Investments
Meet government and audit regulations with compliance management that helps turn requirements into strategic advantages. Protect your business integrity with proper compliance. Management solutions help you take back control with IBM Tivoli.
Learn how top CIOs use ITVM to run huge IT organizations like a business
Introducing the HP BladeSystem c-Class server. Now you can set IT free.
Three Things Business Decision-Makers Need To Know About SOA White Paper
The relationship between business and IT is changing. Learn more at NextGenerationInsights.com
Build an intelligent tiered storage infrastructure
FREE IDG Research Report: Measuring the Value of Application Development
Effective RDBMS Security Management: A Process-Based Solution
Novell/Intel Linux-solutions at Virtualization Knowledge Center.
Protect your business today! Make your network secure, fast and reliable with Radware
Coordinate and align development process to release higher quality software, faster. Eradicate the problems that keep your development out-of-sync with IBM Rational Software Quality Solutions.
Sun announces new virtualized datacenter - Project Blackbox. Learn more.
Comprehensive Enterprise Risk and Compliance Solutions from EMC, BEA, Fujitsu and Paisley
Get The Facts on BlackBerry Wireless Solutions for Business
Dollars and Sense: Calculate the ROI Orange solutions can bring your business
A closer look at data backup vs. data archiving
Learn how to better protect your assets - and qualify to win an iPod Nano!
Learn how to get IT staff without breaking the budget
Leverage investments with eBusiness to reach customers and partners. Learn More Now!
Getting eBusiness Right: Key Strategies and Implementation Tips
Over 3,400 retail businesses use our scalable solutions - like category management and forecast & replenishment applications - to increase their responsiveness, flexibility, and profits. Learn More at sap.com/speaks-retail
Wouldn't you rather know how to protect your software at the source?
Sun announces new virtualized datacenter - Project Blackbox. Learn more.
Sun announces new virtualized datacenter - Project Blackbox. Learn more.
Get more out of mobility. Get more out of now.
Service-oriented Enterprise - How to Make Your Business Fast, Flexible, More Responsive
What's crucial to you in a server solution? Take a short survey & get a $25 Amazon gift card.
Don't just let your data sit there. Make it actionable - quickly, simply, affordably.
Start building your business case for SOA. Download webMethods how-to book!
Solaris 10. Free & Open Source. Like printing money in your datacenter. www.sun.com/solaris/domore
Control change, don't just manage it! Learn how in this webinar.
Analyze 1 billion transactions... in 3 seconds. Find out how.
Sun announces new virtualized datacenter - Project Blackbox. Learn more.
The Web Application Management Struggle. View this Webcast Now!
Your Linux is ready(tm). Get SUSE Linux Enterprise 10 from Novell (r)
IT Rationalization: Siemens(r) Approach to IT Transformation
Sun announces new virtualized datacenter - Project Blackbox. Learn more.
Sun announces new virtualized datacenter - Project Blackbox. Learn more.
IT Strategies to Simplify, Accelerate, and Grow Your Business
Taming the Hybrid Beast: Strategies for CIOs to reduce operational overhead and focus more on innovation

Problems/complaints/compliments about this site can be sent to info@cio.com.