Transforming a Federal Agency

Chapter 5Evaluation of Governance, People, Processes, and Technology (GPPT)

As mentioned earlier, it's important to evaluate the company's governance structure, its people, its processes (policies), and its technology—which I collectively brand as GPPT. This evaluation illuminates both the risk areas and where to focus the audit procedures. It's a simple concept, but a powerful technique.

Governance

In its simplest definition, corporate governance is the system by which entities are directed and controlled. A strong corporate governance culture is hard to implement, starts at the highest level of a company (generally the board of directors), and encompasses all aspects of a business. Good corporate governance requires well-documented and understood rules and regulations that are dutifully followed by all employees and processes. It also requires leaders to work together toward a common goal.

Generally, a good company will have solid governance and be strong in at least two of the three areas of people, process, and technology. Strength in one of these areas can compensate for weaknesses in another. For example, strong people can overcome weaknesses in technology, or strong technology can overcome weaknesses in people.¹ It's a perfect situation when a company has strengths in all aspects of GPPT, but that is rare. McDonald's comes to mind. McDonald's operated with tremendous strength in its governance structure led by its board of directors and C-suite executives, which cascaded ...