A predominate theme of corporate governance is the efficient alignment of enterprise business units so that the company’s performance can be continually measured and strategically improved in parallel with efficient tactical operations. Communication, accountability and standardization are primary components of this desired alignment. IT and business executives need to fully understand how various standards for data exchange in their industry space will implicitly enforce and support governance initiatives and strategic decision-making. In keeping with the themes of communication, accountability and standardization, a few of the more successful recent (XML-centric) data exchange formats offer good examples of each from a governance perspective.

For law enforcement agencies that have been adopters of the Global Justice XML Data Model (Global JXDM), business operations have become more efficient and less siloed. Better known as “Justice XML,” this model greatly improves the quality and efficiency of information sharing between law enforcement and public safety institutions. The increased accessibility and sharability of law enforcement data across the entire criminal justice system - locally and nationally - has resulted in more effective policing practices nationwide as well as improved execution of many Homeland Security mandates. Better communication has resulted in a sharpened ability to assess and respond to risks and threats from individuals and criminal and terrorist organizations. Federal, state and local resources can now be allocated more competently; likewise, the effectiveness of new-age law enforcement methodologies such as community policing can be measured with an unprecedented precision and ease. Better law enforcement - all agencies working in tandem and sharing information throughout all national jurisdictions - means better governance of an entire country.

The eXtensible Business Reporting Language, better known as XBRL, gives corporations a leg up on achieving regulatory and compliance objectives by helping streamline the perpetual communication of their most important business and financial data. Sarbanes-Oxley has put corporate executives in a historically unique position of heightened accountability: poor accuracy of financial results can mean harsh legal penalties. The good news is that XBRL is designed to accommodate the most complex of financial reports, such as 10K forms (which are required of all publicly traded companies in the U.S.). As with other valid schemas of XML communication, XBRL is very scalable and can be put to use by all organizations that have robust financial reporting requirements, regardless of industry and regardless of whether or not a company is privately held or traded on an exchange. Both internal and external consumers of corporate financial data - investors, analysts, customers, regulators, etc. - can now process and account for financial data in a much more efficient, accurate and optimized manner when it resides in XBRL format.

Although there continue to be different vocabularies or lexicons used in various vertical markets around the globe, some of the more visible XML schemas have evolved to the point where they are accepted as true industry standards. Two such standards that will not have their momentum reversed are Financial Products Markup Language (FpML) and Market Data Definition Language (MDDL).

  • FpML is now considered to be the primary format of exchange for most processing associated with structured financial products such as swaps and derivatives.
  • MDDL continues to gain credibility as the standard interchange format for global equities, indices and more traditional classes of investment products.

Both standards are flexible enough for storing extremely complex data about different classes of financial products and all their business interactions, organizing financial market information in a modular schema that is readable. By canonizing the formats and definitions of the most common and critical financial data elements that get processed by various trading and market data systems, regulatory compliance transforms into a more lucid affair. Communication with internal company systems and external auditors and regulatory bodies becomes better defined. MDDL and FpML also lend themselves to the latest developments in service-oriented architectures and real-time messaging infrastructures that have become the standard for communication of financial data in mission-critical brokerage and banking systems - from trade execution to settlement.
New XML data exchange standards continue to evolve and materialize at all levels of business, as global consortia reach new heights of cooperation in standards-based best practices. Improved lexical and schematic standards of data exchange have given enterprises distinct advantages in achieving increased data integrity. From better control and confidence in semantics and domains evolve more effective business intelligence solutions - from data warehouses to executive dashboards. For the foreseeable future, demand will be high for expertise that can capably integrate these different data communication and transfer standards. For example, financial organizations may want to integrate MDDL-based content with Justice XML feeds to support know-your-customer or anti-money-laundering dictates. Executives that focus on governance initiatives should understand what open and free data exchange standards exist in their industry and how to harness their innate benefits in order to reduce operational constraints (especially those associated with data) and better capture and measure company-wide performance.

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