What Every Director and Leader Should Know About Data Governance

Yet too often, leaders treat data as a technical matter that sits solely with the IT team. The reality? Data governance is now a core leadership capability. 

The Australian Institute of Company Directors (AICD) makes this point clear in its recent publication, Data Governance Foundations for Boards. Rather than being a document for CISOs or IT managers, it’s a call to action for directors and senior leaders across every sector, especially SMEs and Not-For-Profit (NFP) companies. 

Let’s draw an important distinction: data governance is not about managing databases or choosing the best cloud storage tool. It’s about data oversight and accountability. According to the AICD: 

“Data governance refers to the policies, frameworks and decision-making steps that guide the collection, availability, usability, integrity, and security of data across the organisation.”

Directors and leaders are accountable for ensuring this governance exists and that it aligns with organisational purpose, risk appetite, and strategy. 

The AICD outlines three major forces accelerating the need for active data governance: 

1. Regulatory escalation:
With reforms to the Privacy Act, mandatory breach notification schemes, and new AI and cyber obligations, boards are no longer insulated from digital risk. Failing to govern data can now result in legal, financial, and reputational exposure. 

2. AI and digital transformation:
AI systems require high-quality, well-governed data. Without that foundation, automation efforts are either ineffective, or worse, harmful (biased hiring, inaccurate insights, opaque decisions). 

3. Stakeholder expectations:
Customers, donors, clients, and partners expect their data to be treated ethically, transparently, and securely regardless of the size of organisation or resources. Directors must now meet a trust standard, not just a compliance standard. 

Based on the AICD’s guidance, here’s what directors and leaders must ask, understand, and influence across the five principles: 

1. Treat Key Organisational Data as a Strategic Asset 

• What data do you have? 
• How is data supporting your business model, client outcomes, and growth strategies? 
• Do you have a documented data strategy aligned with your objectives? 

2. Define Clear Data Governance Accountability 

• Is someone responsible for data governance at the executive level? 
• Are key digital and IT service providers covered in your board risk lens? 
• Is your board receiving regular updates on data use, risks, and opportunities? 

3. Manage Risk Across the Lifecycle 

• Where is your data, and who has access to it? 
• Have you mapped your data flows (what’s collected, where it’s stored, who accesses it)? 
• Are legacy systems creating blind spots? 
• Are you minimising the collection of high-risk personal data and deleting what’s no longer needed? 

4. Build and Set the Tone for a Data Culture 

• Leadership signals what matters. 
• Do you ask for data in board reports? 
• Are you investing in upskilling your team’s data literacy? 
• Are decisions big or small informed by data, or still driven by instinct? 

5. Plan and Prepare for Data Incidents and Recovery 

• Not if, but when.  
• Is there a documented, tested incident response plan? 
• Do directors know how and when they’d be notified of a data breach? 
• How would your organisation communicate with affected stakeholders — and rebuild trust? 

Smaller organisations, especially not-for-profits, often collect deeply sensitive information: client health data, trauma disclosures, family circumstances, donor history, even photos or location data. But with limited IT resourcing and no dedicated data roles, responsibility can feel blurry and challenging. 

That doesn’t mean expectations are lower. In fact, these organisations are: 

• Held to increasingly high standards by funders, regulators, and insurers 
• Often operating in communities where trust is fragile and hard-won 
• Just one breach or mistake away from major reputational fallout, even if unintended 

The AICD recognises this challenge and calls for proportionate, achievable governance foundations. 

• Have we reviewed and endorsed a clear data strategy that aligns with our organisational goals? 
• Do we understand what data we collect, where it’s stored, who can access it, and why we need it? 
• Are we relying on outdated systems or untested assumptions? 
• How are we using data to measure performance and guide strategic decisions at board level? 
• Are our data security controls keeping pace with how we use technology? 
• Do we understand stakeholder expectations around data privacy, and are we meeting them? 
• Are we confident in our readiness to respond to a data breach including legal, regulatory, and communication obligations? 

Digital transformation isn’t something that happens to your organisation, it’s something you lead. And data governance is the foundation. 

It’s no longer acceptable to “not understand” the data space. You don’t need to become technical, but you do need to be accountable. 

We help directors and leadership teams bring clarity to complexity with strategic, proportionate approaches to data governance, cyber security, and digital confidence. If you need guidance on developing a comprehensive, fit-for-purpose Data Governance Framework for your organisation, please get in touch.