Information Management

Information management is material relating specifically to the management of information in an enterprise. All information technology, by definition, is within this topic, but so too is management processes and techniques.

The nature of ambiguity

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The following is an excerpt from my thesis, written in 2000. 

Ambiguity is an inherent property of all natural languages, including English (Jespersen 1922; Williamson 1994). Absolute precision of a language is pragmatically undesirable, because the language is unable to adapt to new concepts (Williamson 1994). The communication needed to ensure effective and efficient report production, however, requires complete clarity. Hence, a tension exists between the natural language’s need for flexibility in the long term and the need for precision in the short term. Natural language is at once both dysfunctional and poorly adapted to the functions language needs to perform, yet flexible and broad-based such that it is useable in practice (Chomsky 1990).

Interest in linguistic ambiguity has an extensive history, and has been recognised as a separate branch of study since at least Aristotle’s time (Kooij 1971). Aristotle noted that language must be ambiguous, as a language has limited words but an infinite number of things and concepts to which those words must apply (Kooij 1971).

Russell (1923) recognised that all natural languages are vague and ambiguous. Excluding the realm of mathematical symbolism, constructing completely unambiguous expressions is not possible with the syntax and vocabulary tools available within natural languages (Williamson 1994). To endure and survive, language requires the flexibility to communicate new concepts. Ambiguity necessarily derives from the flexibility of natural language.

Kooij (1971) states that ambiguity arises where a sentence can be interpreted in more than one way. Similarly, Walton (1996) considers a sentence or statement to be more ambiguous as the number of legitimate interpretations of the sentence (or paragraph) increase. Ambiguity implies multiplicity of meaning (Walton 1996).

In classical analysis, the multiplex (Latin for “multiple meaning”) categorisation of Alexander of Aphrodisius (Hamblin 1970) suggests a basis for the identification of categories of ambiguity. In classical literature, Alexander of Aphrodisius identified three categories of ambiguity: potential, actual, and imaginary. Walton (1996) adapts this classical multiplex categorisation to his identified types of ambiguity.

Walton (1996) identifies six classical types of ambiguity in natural language: lexical, syntactical, inflective, pragmatic, emphatic, and suggestive. In addition to Walton’s (1996) taxonomy, extraneous information and noise in the communication can also be a source of ambiguity. Extraneous ambiguity arises where the communication is not parsimonious, or the communication includes information that is not directly relevant to the message being communicated (Fowler and Aaron 1998). Extraneous ambiguity is an actual ambiguity within the Walton (1996) taxonomy.

Each ambiguity type can be independently present within the communication. Walton’s (1996) modified taxonomy and model of ambiguity is presented in Figure 1.

Figure 1
Types of Ambiguity (adapted from Walton 1996)

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An introduction to the Carbon Emissions Reporting regime in Australia

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This is a blog post from a CPA Australia Carbon Emissions Reporting Discussion Group meeting – the inaugural meeting – that I attended on 18th November 2008.  Danny Power from PwC is the convenor. 

There will be an election of office-bearers at the end of the next meeting.  The topics under discussion are going to be quite broad-ranging.  Danny is linking it to the sustainability reporting issues, and Danny seems to think the label might change later.  However, Carbon Emissions Reporting is the current label for the group – thinks we might need to break into several discussion groups at some point (I’m not sure about that – see how popular it is).  There were about 40 people in attendance at this first meeting, though, which is always a good sign. 

Why did Danny set up the discussion group?

  • Compliance issues
  • The accountant’s role as a business advisor and in managing the reporting systems
  • Impacts for all organisations whether direct or indirect
  • “The Science” – still seems controversial, and if you’re going to report on it you need a working knowledge of what the processes are and how it works. 
  • Possibly the most important – to create a support and peer group for each other.

Schemes, coverage, compliance and impacts

This section of the presentation was given by Mick Zeljko of the Climate Change Team of PricewaterhouseCoopers. 

The finance function of most companies will be generally involved it seems in managing the reporting process, which is a substantial – very substantial – part of the new CPRS. 
Emissions Schemes

Current programs:

  • Mandatory Renewable Energy Target (MRET)
  • NSW Greenhouse Gas Abatement Scheme (GGAS)
  • Qld Gas Electricity Scheme (GECS)
  • Greenhouse Challenge Plus
  • Energy Efficiency Opportunities

The scope of these current programs is fairly limited and tend to be industry-specific.  There is a general feeling that perhaps people have been a little bit lax about the current programs, and it’s been pretty relaxed with the result that there has not been a lot of accuracy in the numbers that are currently being reported.  Probably a lot of companies don’t really have a lot of confidence in their reporting schemes. 

New Schemes:

  • National Greenhouse and Energy Reporting System (NGERS)
  • Carbon Pollution Reduction Scheme (CPRS)

NGERS will cover a lot less companies than those that are affected by ETS.  Types of gasses – six Kyoto gasses – CO2 and Methane and so on.  All measured in terms of CO2 equivalency – for example, methane is 20 times stronger than CO2, so 1 tonne of emitted methane is 20 CO2 Tonne Equivalents.

The NGERS does get down to 200 terajoules and 50 kilotonnes in 2010.  ETS will require only 25KT in 2010 so it is a little disconnected from NGERS – you can probably expect that the two programs will come into alignment. 

The Emission Trading Scheme (ETS) is now officially called CPRS – Carbon Pollution Reduction Scheme.  The feeling is that it sounds better to be reducing carbon pollution than trading the rights to emit pollution.  The scheme generally caps Australia’s emissions, and then identifies industries subject to the cap.  These industries are then allocated permits and at the end of the year have to have permits to cover what they emitted or pay a substantive fine.  If you don’t have the permits, you have to go buy them from someone who does.  This is the essence of the ‘cap and trade’ system.  

Under the scheme:

  • Government allocates or auctions permits up to the cap annually.
  • Companies compete on the market to acquire required permits.
  • Permits can be traded at market prices between firms and third parties.
  • Scheme requires robust monitoring, reporting and assurance of data.
  • Transitional assistance measures are included
  • A number of elements are yet to be finalised
    • Including emissions target trajectories, penalties for non-compliance and complementary measures for non-covered sectors. 

A green paper was released in July.  Everyone affected is throwing a submission at the government.  The government is aiming to have draft legislation ready by the end of the year.  There remains a whole bunch of stuff that is yet to be finalised, particularly emissions trajectories.  We don’t know what the limits will be yet though – what the targets will be. 

Covered sectors:

  • Stationary energy
  • Industrial processes
  • Fugitive emissions (e.g. mining and landfill)
  • Waste
  • Transport
  • Reforestation (opt-in – gets you credits)
  • Agriculture may come in later, around 2015.

Liability generally relies upon the emitter.  Generally it is upstream supply liability.

Emissions covered include:  Scope 1 (i.e. direct for example emissions from a generator) emissions only.  Contrast with NGERS which includes Scope 2 (e.g. indirect such as a factory’s use of electricity) across all 6 Kyoto Greenhouses. 

Threshold

  • Direct emissions of 25,000 tonnes of CO2e (Carbon Equivalents). 

The affected businesses will need to be collecting up systems, processes and governance to get NGERS into place. 

I wonder what the definition of an entity (i.e. a ‘business’ will be in the covered industry?). 

The first NGERS reporting period has commenced, those these systems etc will need to be in place from the point of view of affected NGERS entities.  CPRS Green Paper submissions are now closed.  The draft legislation is due out in early September, and they seem to want to have the legislation in place by the end of the year.  The Government wants to set medium-term national trajectories soon, and are aiming for a 1 July 2010 start.  These trajectories will affect how many permits are available – they will not determine who is affected by CPRS. 
We in Australia will have two full reporting periods and  given thethen full trading will commence under CPRS.  Unless it doesn’t  current financial crisis. 

Under NGERS – compliance is about registering and reporting.  Penalties apply for corporations and CEOs.

Project Definition

There are a a whole lot of rules and legislation around wh`o effectively owns the emissions.  A big mining site will have a lot of issues just working out what are we reporting on.

Systems Implementation

  • Collect greenhouse and energy data
  • Calculate greenhouse and energy data – there is a measurement determination that tells you how you work out how much CO2 you emit.  There are proxy things in place. 
  • Got to have good storage of records for any audit down the track.

Maybe I have a large IT bent, but I can see that this is going to be a problem for anybody seeking to implement Greenhouse Gas Reporting Systems and implement it through the accounting information system.  Or even if they don’t. 

Clearly it will have an impact upon reporting processes, and who does it – and I suspect this job will often fall to the finance function. 

Reporting

  • Register with GEDO
  • Prepare and submit data using OSCAR.  (See Greenhouse Challenge Plus).
  • There will be a lot of internal reporting as well particularly for companies that are CPRS-liable. 

Governance

  • Need a whole lot of things covering all of this to make sure it keeps ticking along. 

Companies will have to be NGERS compliance at a minimum. 

Assurance – large emitters (>125KT CO2) will require third party assurance of the information prior to submission.  Beyond these core issues we don’t know much around how it is taxed and so on.  The draft legislation hasn’t come out yet.  There are thousands of submissions being put in place.

If you are liable there are serious financial implications and also some compliance costs.  Indirect impacts will result in price increases it seems – which will be the main issue for SME’s. 
Indirect impacts are going to be increasing on just about everyone.  Transport and logistics – may see a complete change in the competitive position between transport for example.  For instance you will need to reconsider where you get your services from e.g. road vs rail.

Need to do a risk assessment now.  Carbon due diligence.  Green paper submissions were a big thing a little while ago.

Strategic Response – can do a lot of stuff now.  There are opportunities for new services and products – carbon market planning and financial advice.

CPRS Accounting Issues:

  • Permits acquired to satisfy obligation = intangibles
  • Permits acquired for trading = inventory
  • Measurement choices available
  • Impact of CPRS on impairment calculations
  • Accounting disclosures which may be required.
  • How to account for forward purchase agreements of carbon pollution permits
  • Broadly – what impact will the acquisition, trading, hedging and surrender of carbon plollution permits on reporting.
  • Tax treatment?  Still yet to be decided. 

We also noted in the presentation that cashflow issues exist potentially for people that have to buy permits up front. 

There will be another meeting in February, probably, of the Discussion Group.  It was a very interesting discussion and it will be interesting to see where these compliance issues around the Carbon Emission Emissions Reporting processes take us.  And as we can see above – there are assurance implications (although supposedly only for >125KT emitters?).

More notices as events warrant.

Can employers tell us what we can do in our private, online social networking, lives?

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If your employer tells you to ‘stop doing that, you’ll go blind’ online, do you have to stop doing it? 

Short answer:  yes, with a but. 

As I specialise in long answers though – see below.  Caveat – I’m not a lawyer.  This probably misses a ton of stuff cos I’ve shortened it from the original, much longer, draft.  This is just for discussion, comment, and thought provocation at the moment.  It also has far too many Battlestar Galactica references. 

At law it is generally well recognised that employees have several duties of care that they owe to their employer . There are three core duties of an employee to their employer that have a clear link to an employee’s online social networking activities:

  • to work with care and diligence,
  • to obey all lawful and reasonable orders, and
  • to act with good faith and fidelity.

There are essentially two types of employee: a standard employee (on a time-service contract) and a professional or staff employee (on a task-performance contract) . Professional and staff employees, and especially those employees with client-facing roles, are generally held to a higher standard, particularly where their actions may tarnish the employer’s image.

The employee has a positive duty to be efficient, and to avoid negligence in carrying out the work. In the context of online social networking, an employee might breach this duty where their use of such tools affected their efficiency (for example, through cyberslacking) or using a social networking tool in an inappropriate way (for example, to store client material or to carry on client conversations).

An employee must also obey the ‘lawful and reasonable’ orders of their employer, taking all reasonable steps to carry out the tasks promised under the contract of employment. Criminal acts outside of the workplace may prevent the employee from carrying out their duties, and thus breach this duty. So if you joined an illegal OSN, or advocated criminal behaviour in an OSN (use your imagination but it probably involves terrorism, nazis, or pavlova) it might be difficult to keep doing your fracking job (sorry – Battlestar Galactica reference).

It is likely though that the activity would need to be very much at odds with the employee’s role for summary dismissal or discipline to be justified.

Employees do have a duty to act with good faith and fidelity (see especially Blyth Chemicals Ltd v Bushnell 1933 ). Employees must not act in a manner that is in conflict with the interests of their employer.

As part of this duty of good faith and fidelity, the employee must not disclose information where disclosure of such private information (for example, profits and losses, customers, methods and techniques, etc) might help a competitor. It is likely, for instance, that posting a blog topic about business strategy, or the file notes from an internal meeting, would breach the duty. The duty operates to limit the employee’s ability to comment upon the business of the employer.

I was flabbergasted to find though that in the Cockatoo Docks Case (1946) it was found that an employer was justified in summarily dismissing an employee who wrote an article in a Labor Party newspaper that was critical of his employer. Try that one on today! Although it is not likely that this decision would be followed today, there are clear parallels to be drawn with online social networking activities.

The biggest issue for bloggers and Facebookers everywhere? Tarnishing corporate image.

For this duty to be beached there generally needs to be a relevant link with the employer such as a uniform. In Rose v Telstra Corporation 1998 it was acknowledged that employers ‘do not have an unfettered right to sit in judgment on the out of work behaviour of their employees. An employee is entitled to a private life.’

In the context of online social networking, presumably this connection would exist where the employee discloses the name of their current employer, or where the individual is in a senior client-facing role so as to be likely to be identified from their profile by a customer or prospective customer.

Some employers use things such as AWA’s etc to prevent, for example, a mining company employer stopping an employee joining a group that is protesting the mining company’s actions.

As a general principle, employers seeking to rely upon this power of control must set out their expectations very clearly, and ensure that the employee has consented to such contractual terms and that the expectations have been brought to the employee’s notice. In particular, the duty that an employee owes to act in good faith and with fidelity operates so that the employee should not ‘tarnish the business’s image’. The business’s expectations of its employees however must be very clear if the employer seeks to control their employees’ actions in private.

Personally I’m coming to the view that if it’s your private blog or Facebook, keep your employer’s name out of it – it’ll be sweeter for all that way.

Image from Flickr User Akbar Simonse.  Some Rights Reserved.

Friendly business

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The business of accounting is business. Nobody said that, but it’s true nonetheless. Accounting is a profession that is definitely not about counting beans and wearing cardigans these days. CPA Australia members are core parts of every aspect of Australian business life, and so it is unsurprising that they are often among the first to identify new business issues as they arise and they are the ones given to advises for business improvement. For example, an issue noted recently is the potential impact that online social networking has upon business, and if you work from home in your business, you will need to learn how to take home pay for this. These websites allow friends to chat, share photographs, videos, and to discuss their work, lives, loves, wins and losses. At last count, there were more than six million Australians with profiles on Facebook and MySpace.

It is hardly a business issue that Australians have friends. Mateship is an Australian tradition, whether on the Kokoda track or on Facebook. The issue is that, as our world becomes more connected, it is increasingly difficult to separate personal lives from the world of ‘work’. Private actions now take place in very public places, with search engines voyeuristically distributing these activities for the entire world to see. Consider the recent YouTube ‘star’ who made negative comments about his employer. Once, those excruciating videos would have tormented only his unfortunate immediate family. YouTube provides the conduit to a whole new audience. Questionable tastes in humour cross organisational hierarchies though. There may be regrets for the partner of a consulting firm whose photo was posted online by a member of his staff, complete with Hitler moustache, swastika, and a Nazi salute. Not perhaps the look his professional profile is looking for.

Business owners must cross the generational and digital divide to become digital citizens so as not to be caught unawares, like the new owner of a motor dealership who was unaware of a web comment telling prospective customers to ‘avoid [the dealership] like the plague’. Three years on, that advice is still there and is prominently displayed when new customers Google the dealership. Twitter, a relatively new social networking service, allows users to post ‘microblogs’ from their mobile phone. Comments damaging a business’s online reputation are regularly made there – at one store, while still in the store, a customer ‘tweeted’ to her 789 ‘followers’ about the bad service received.

It is not all negative. Delight the digital citizens and your business will benefit. Robert Scoble, a particularly notorious blogger, mentioned a new book he was reading in a single tweet. With over 34,000 followers, it seems people took note, and the book quickly scaled the heights of the Amazon best seller list.

A generation has matured with the internet at their fingertips. This is a different world than the old world of football, kangaroos, meat pies and Holden cars. Your customers use the internet to inform their opinions. A business can take some steps to present itself in the best light possible, but actively manipulating information is unwise. The punishment for chicanery and ‘bad behaviour’ online is unpleasant, caustic and swift. Transparency and honesty are necessary in the digital world. The actions of an over-zealous employee can quickly ensure that a business is condemned to the scrapheap of irrelevance – consider the very public example of the software developer 2Clix who brought legal action against Whirlpool to have negative comments taken down from its forums.

Increasingly, ‘personal’ and ‘work’ lives collide. People need to be a little more circumspect when posting material online. Activities are often publicly available and can be seen by anyone – an audience perhaps not originally considered. Recruiters increasingly Google a candidate’s name to see what can be discovered. Personal information can be used for identity theft, and likewise corporate information on personal profiles can be used for ‘social engineering’ scams to defraud the business.

Is this an accounting issue? Probably not. Is it a business issue? Definitely, and accountants fundamentally are about business. The CPA Congress in Melbourne this year includes a workshop to help people understand how they can use online social networking tools without causing great grief, and how a business can respond to the business challenge of online social networking in a positive way. This workshop will be particularly beneficial for businesses seeking guidance in navigating the digital landscape effectively. Experienced accountants, like those at the Professional Corporate Services In Australia, can offer valuable insights and strategies to optimize online presence and mitigate risks. For those few people that are natural digital denizens, the workshop will discuss tactics they already know. For others, there will be hints and tips that will save them time, money, and a poor online reputation.

The social networking phenomenon is here to stay and will continue to grow. Businesses must understand the impact of social networking upon the business, and monitor their ‘internet footprint’. Individuals must understand acceptable behaviour when living out their digital life. Simply ‘banning’ or ‘ignoring’ online social networking is rarely helpful. A sensible and informed approach is important, with an awareness of the potential risks and problems. For tailored guidance on managing financial challenges, consulting with an Insolvency Practitioner Bedfordshire can provide valuable insights and support.

Social networking: sometimes, it’s about business.

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Bringing online social networking to business – through ‘old media’

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Last Friday I had the pleasure of what is probably my first ‘real’ media experience.  I’ve done newspapers and magazines before, of course, and I’ve certainly written plenty of opinion pieces for a great variety of fora (websites, magazines, newspapers, etc), but I’ve never done live radio or live TV before.  I’ve still not done live TV, but I have now done live radio with ABC local radio through Richard Stubbs in Melbourne, Bronwen Wade in the Riverland (South Australia) on Monday, and Paula Tapiolas in Townsville on Tuesday.

It’s an interesting experience – particularly the Melbourne interview, which was on Friday and was the longest session I’ve had (although, the beauty of radio seems to be that you get the luxury of discussing the issue a bit at length – and you don’t have to shave if you’re on the phone).  The Melbourne interview I did from what I do believe was called a Tardis – which is an airless dark box with a microphone and a headset at the Toowong studios here in Queensland.
As a parent and I joked this morning, luckily I wasn’t there to talk about claustrophobia…

Actually, though, I was there to discuss the business impact of social media marketing, which is a topic that’s dear to my heart, particularly since I am putting the finishing touches to the Online Social Networking Guide for CPA Australia (and I might get to do that the instant I stop doing radio interviews and marking assignments).

As you would expect, the questions of all the interviews were fairly basic to anyone who has any exposure to the online world – I did particularly like the Townsville interview, probably because no matter what I do I’m still a parochial Queenslander (and Townsville was the third interview in a row, so perhaps I now know what I want to talk about).  The themes were around the risks to business, although I did try to bring in the benefits of online social networking as much as I could.

Certainly, if I have a mission in these interviews it is that I am trying to get businesses to set up Google alerts, be aware of what’s going on in the social networking space, and let their staff know what is acceptable and what is not when it comes to their business’s brand.

Anyway, anyone who wants to be scarred some more can listen to my interview with Richard Stubbs online here.

Ironically I haven’t heard from ABC 612 here in Brisbane, whose studios are all of three kilometres from my house and would be better for my consulting business than, say for instance, building my LinkedIn network in Melbourne :).