Using Balanced Scorecards to Improve Corporate Governance

SAP released “Enterprise Performance Management” in response to customer demand for strategic management integrated within their solution. Now, in the wake of the Global credit crisis, the unprecedented emphasis on Corporate Governance can be systematically addressed and underpinned by SAP SM.
Balanced Scorecards are used worldwide as a tool for implementing enterprise strategy. A growing trend is to use the tool for interactive discussions with board members about strategic direction ‐ and to keep the board apprised of the information essential to enable them to fulfil their performance and governance oversight responsibilities.

Boards of Management fulfil five major responsibilities: approve and monitor strategy; approve major financial decisions; select and evaluate the CEO and executive team and ensure succession continuity; provide counsel and support to the CEO; and ensure compliance to regulatory and financial requirements.
Enterprise Strategy Maps and their associated Balanced Scorecards – along with supporting scorecards where appropriate – are becoming prime documents for distribution to the board. Once in place, with proven trustworthy and robust content, they are setting the agenda for board meetings, CEO and governance reviews.

The three‐part balanced scorecard‐based system outlined offers a proven methodology to give directors streamlined and focussed strategic information about the company.

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