Why data governance belongs in the boardroom

A new resource from Melbourne Business School, Allens and the Australian Institute for Company Directors provides critical guidance on how board directors can govern data responsibly.

Why data governance belongs in the boardroom | CFBA

When you think of data, most directors might think of financial or structured data.

But more than 80% of data available to organisations is unstructured, things like documents, emails, images and videos.

Unstructured data has traditionally remained largely untapped, but the emergence of Generative AI is opening new possibilities to extract meaningful value from it explains Professor Yalçın Akçay.

“Effectively leveraging both structured and unstructured data is essential for harnessing the full potential of data analytics and AI—enabling innovation while helping to identify and manage associated risks,” Professor Akçay said.

“What that means, is data governance is no longer only a back-office concern for IT departments, it’s a critical responsibility for board directors, too.”

To address this need, Melbourne Business School’s Centre for Business Analytics collaborated with the Australian Institute of Company Directors (AICD) and legal firm Allens to produce a new resource: ‘Data Governance Foundations for Boards: Key Principles for Director Oversight and Value Creation.”

Board directors already play a critical role when it comes to risk and governance of their organisations, data governance allows directors to play a more active strategic role.

“If Directors understand the value that can be extracted from data—beyond risk mitigation—they can guide their organisations toward innovation rather than simply playing defence,” Professor Akçay said.

Demystifying data

Many directors feel intimidated when faced with data, a challenge this resource aims to address.

Professor Akçay said the hesitation around data often stemmed from the Dunning-Kruger effect—where a little knowledge increases confidence, but deeper learning can momentarily deflate confidence before true expertise builds.

“Our goal is to move directors up that curve to build real confidence, not just familiarity. Once they understand what good data governance looks like, they can lead more effectively and ask the right questions,” Professor Akçay said.

Designed for board directors, this resource focuses on governance rather than business execution, offering 10 key questions to deepen understanding of data and highlight potential red flags.

“These red flags are particularly relevant to directors in SMEs or Not-For-Profit organisations who may not have the same resources or internal capability as large corporations,” Professor Akçay said.

Quality data is crucial

The report presents five foundational principles for board-level data governance with case studies from organisations such as the Coles Group, CAR Group, Ramsay Health Care and Fitted for Work.

Organisations vary in their analytics maturity, which affects their ability to extract value from data—whether through understanding causality, making accurate predictions, or supporting optimal decision-making.

“If an organisation wants to truly understand why costs are rising, why customers are churning, or how to make accurate demand predictions, it needs to move beyond basic data analysis and invest in more advanced analytics capabilities,” Professor Akçay said.

“Poor quality data undermines everything—from strategic decision-making to compliance and innovation. Good data governance is a pre-requisite for any AI program.”

Data as a strategic asset

The publication stemmed from joint educational initiatives led by Professor Akçay and Wendy Stops - Chair of the Centre’s Industry Advisory Board and Non-Executive Director at Coles Group.

The initiatives are aimed at advancing data literacy and governance capabilities at the highest levels of organisational leadership.

“Board education is often overlooked, and this publication seeks to fill that gap by equipping directors with the insights needed to govern data effectively and strategically,” Professor Akçay said.

Professor Akçay co-authored the report with Executive Director Anita Arbogast who recently completed the AICD Company Directors Course, bringing a valuable dual perspective—combining board-level insight with academic expertise.

“Anita’s leadership, deep policy insight, and practical understanding of how boards operate were instrumental in shaping guidance that will drive real impact,” Professor Akçay said.

Ms Arbogast said boards were increasingly expected to lead this space and strong data governance was no longer optional.

“It’s foundational to the trust, resilience and performance of every organisation,” Ms Arbogast said.

“This publication equips directors with the clarity and confidence to ask the right questions, challenge assumptions, and oversee data in a way that supports innovation while safeguarding integrity.”

For directors or executives seeking to build their data capabilities, Melbourne Business School offers short courses, including Data for Decision Makers, focused on developing analytics mindsets for senior leaders and Generative AI for Business, a new, high-impact course providing practical tools for Gen AI applications.

Another specialised program, The Power of Analytics and AI, co-led by Wendy Stops, is designed for board members looking to strengthen their understanding of analytics at the strategic level.