The Key to Good Control
Granted, control negates comfort. But we need good controls as a balance mechanism for our tendency to veer out of control (talk about irony!). IMHO, there are several characteristics for a control to be considered as a good control.
- Scalable. A control ought to work for a small number of occurences as well as for a gazillion occurences. Growth – or shrinkage – of occurences should be taken as a factor. Before considering a control, ask yourself the following question: if a control is good for today’s hundreds of transactions, will it still be good for next year’s thousands?
- Automatic. By automatic, I mean that if there is a possibility of applying automated or machine-based controls, use it. Humans are judgmental and often biased, two characteristics which almost always make us ill-fitted to enforce control. Use automated controls, then use human judgment to handle the exceptions.
- Pervasive. A chain is as strong as its weakest link. There’s no purpose on strengthening one part of the business process while having a big gaping hole on the other part. Controls should be put in place in the every steps of the business process.
- Provides for a degree of latitude. Nothing is absolute, even for the controls themselves. We have to keep a balance between control and business. There’s no purpose of building tight, prudent, and secure controls if they restrict business growth. Give the business a degree of freedom and put compensating controls in place as a guard rail.
I feel that the list above is incomplete. Any suggestions?