The Subprime Credit Crisis is not even half over, but one thing we should have all learned by now is that Banks that paid attention to Data Governance lost the least. Whether they were able improve decision-making with better quality loan origination data or calculate risk with enhanced x-functional tools, some banks had better operational programs and show better returns.
In the wake of Subprime, fund managers should be asking companies they invest in about their Data Governance practices. Questions like:
1. Do they have a DG Organizational Structure that creates enterprise policies and reports results to the Board of Directors?2. Is there a Stewardship function that assess data quality on an ongoing basis and works to improve operational decision-making with high quality data?3. Are Data, Security, and Risk functions working together to maximize internal intelligence about operational, credit, and market risk controls?4. Can the organization calculate risk and forecast potential losses?
If a company today can't answer these questions intelligently, they are not governing their information assets and the market should represent those management failures in share prices.
Data is the raw material of the Global Information Economy. Companies that govern its uses well will demonstrate better bottom line performance. Companies that don't carry an investment risk. It's that simple.