Glossary  Governance

Governance

Governance in companies explained simply

Good governance is essential for a company's long-term success. In an increasingly complex world, clear guidelines, processes and structures are essential. These allow risks to be minimised and regulatory requirements to be met more efficiently.

Companies are currently facing challenges such as accelerated technological change and rising stakeholder expectations. A well-thought-out governance strategy can provide direction and stability in this context. But what does governance mean? How do the various areas, such as corporate governance, data governance and IT governance, differ from one another?

What is Governance? Definition and meaning

Governance encompasses all the rules, procedures and processes that ensure a company is managed responsibly, efficiently and in line with its objectives. This is also known as corporate governance.

It involves not only complying with legal requirements, but also creating clear responsibilities and decision-making structures. Governance is divided into various sub-areas, each of which has specific objectives:

• Corporate Governance
• Data Governance
• IT Governance

Corporate governance provides the procedural basis for sustainable corporate development. Clear definitions of rules and structures enable risks to be managed more effectively and opportunities to be exploited more efficiently.

The various areas of governance should not be viewed in isolation. A holistic governance strategy integrates corporate, data, and IT governance to ensure that corporate processes are legally compliant.

Corporate governance: responsibility and transparency in corporate management

Corporate governance lies at the heart of responsible corporate management. It encompasses the principles and mechanisms that ensure a company is managed in the interests of its stakeholders.

Following public economic scandals, the importance of corporate governance has increased significantly. Transparency, accountability and fairness are now essential components of any successful corporate strategy.

The German Corporate Governance Code (GCGC) is a key instrument for encouraging good corporate governance practices in Germany. It provides recommendations on the collaboration between the Management and Supervisory Boards, as well as on the dissemination of information to shareholders and the public. By adhering to these standards, a company signals trust and stability to its shareholders and stakeholders.

Similar frameworks also exist in Switzerland and Austria. In Switzerland, for example, there is the Swiss Code of Best Practice for Corporate Governance. This provides recommendations for responsible corporate governance, particularly for listed companies. In Austria, the Austrian Code of Corporate Governance promotes transparency and sustainable corporate development. Both codes share similar objectives with their German counterparts and emphasise the importance of good governance throughout the DACH region. What role does governance play in the context of identity verification?

What role does governance play in the context of identity verification?

The following practical example illustrates the importance of corporate governance in identity verification. A financial services company is faced with the challenge of making its digital onboarding processes more secure and efficient. By implementing clear governance structures for identity verification, the company can significantly reduce fraud risks, comply more efficiently with regulatory requirements such as KYC (Know Your Customer) and AML (Anti-Money Laundering), and improve the user experience for legitimate customers. This leads to greater customer trust and efficient process automation with faster digital identity verification — a process that is also essential for creating a qualified electronic signature.

Data Governance: security and control over data

Data is a valuable business asset. You may have heard the saying, 'Data is the new oil'. Data provides a solid foundation for business decisions, innovation processes, and the operation of business models and processes. Effective data governance ensures these valuable resources remain secure, accurate and accessible.

Data governance is defined as the management and control of all a company's data. Both organisational and technical measures play a role here. Effective data governance improves data quality, minimises security risks, and facilitates compliance with legal requirements, such as the General Data Protection Regulation (GDPR) and the Swiss Data Protection Act (DPA).

Cloud-based data governance is becoming increasingly important in many companies. While cloud solutions enable more flexible and scalable data management, they also pose new challenges in terms of data security and access control. The European Union's Data Governance Act aims to establish consistent standards for data management and cross-border data exchange across Europe.

Strong data governance enables companies to make better use of their data while reducing the risks associated with handling sensitive information — a key aspect of fraud prevention.

IT Governance: Technology as a success factor

In the digital era, the IT department plays a pivotal role in a company's success. Effective IT governance ensures that IT strategies, processes, and resources are optimally aligned with the company's objectives.

IT governance comprises several core elements, including:

• Risk management: identifying and managing IT-related risks such as cyberattacks or system failures.
• Compliance: Ensuring that all IT processes comply with the relevant legal and regulatory requirements.
• Innovation: using new technologies to promote efficiency and competitiveness.

Various models, such as the COBIT framework and ITIL, provide companies with practical methods for establishing effective IT governance. These models help to standardise and continuously improve IT processes. ISO 27001 certification also signifies high-quality IT, particularly when supplemented by measures such as two-factor authentication.

Push good Governance with PXL Vision

At PXL Vision, we support companies in effectively implementing their governance goals, with a particular focus on secure digital identity verification. Our software platform offers automated identity verification processes that meet legal requirements such as KYC, AML and GDPR, and are easy to use and scalable.

Thanks to our modular technology, companies can optimise their digital onboarding processes, minimise fraud risks, and comply with regulatory requirements securely. By combining biometric verification, document recognition, and AI-supported plausibility checks, PXL Vision plays a key role in seamlessly integrating governance requirements into everyday digital life.