Information Age: News, analysis & insight for IT & business leaders

It has been said time and time again that it will take many years before society can properly absorb, exploit and adjust to the technology innovations of the past 20 years. Two very different and very high-profile cases that have recently appeared in court demonstrate this with stark clarity.

In Delaware - the state where almost all big US companies are registered - directors of DaimlerChrysler were defending a lawsuit brought by billionaire casino operator and Chrysler shareholder Kirk Kerkorian. Kerkorian alleges that the board of Chrysler misled investors about the nature of the merger with Daimler, and that it was really a takeover by the German company. He is seeking $2 billion in damages.

During the hearing, astonished observers heard a series of very well-paid directors admit that they had either not read the stack of merger documents that arrived at their offices or they had merely skimmed them. This was in spite of the fact that this was one of the biggest mergers in corporate history, and one which had wide political and corporate implications, as well personal ones for the directors involved.

But there is more. The hearing was abruptly suspended in December when a few pages of notes, made by the chief financial officer of the former Chrysler Corp, were suddenly brought into evidence. They had, it seems, been lost in 'the system' for several years, but had suddenly surfaced.

This is exactly the kind of the thing that the IT industry's current fixation on corporate governance is supposed to address. It is also, of course, the focus of the Sarbanes-Oxley Act, the US law designed to improve corporate governance practices.

The two sections of the Act receiving greatest attention from IT suppliers relate to the documentation of internal systems and processes and the 'real-time' disclosure of any material change in a company's financial condition. In other words, companies must prove they have good business intelligence and must become more transparent.

The DaimlerChrysler merger happened in 1988, the Enron scandal in 2001, and the WorldCom affair in 2002, all before the Sarbanes-Oxley Act, passed in July in 2002. But even so, it may take decades before business executives routinely have instant access to the documents they need, and, moreover, are fully supported by electronic tools enabling them to sort out and analyse the relevant from the irrelevant material.

Tragic consequences

The second court case was more far more tragic. In the UK, evidence withheld from the Soham murder trial shows that Humberside police held crucial information on the murderer Ian Huntley, yet did not keep it on their system or pass it on to interested authorities. The reason, it appears, was their belief that to hold information on unconvicted people breached UK data protection laws.

Huntley was savvy enough to exploit this, even applying to see the records that were held on him before applying for jobs for which he may have been vetted.

The confusion of the police is understandable, if tragic. The law and the guidelines surrounding it are confusing. But it is not going to get any easier. A new Data Privacy directive has just been passed, and the Freedom of Information Act is about to come into effect. In some respects, their aims are contradictory.

At a conference in 2002 staged by Infoconomy, publisher of M-iD, one speaker, Paul Strassmann, formerly chief information officer of the US Department of Defense, said that it may be 30 to 50 years before all the political and cultural aspects of electronic business are properly absorbed and worked out. And at another recent Infoconomy conference, Ian Angell, professor of information systems at the London School of Economics, went as far as to describe the Internet as a "job creation scheme for lawyers".

Both are right. While the information age is under construction, there will be many instances where the level of trust in electronic systems is not properly supported by the systems, practices and laws in place. Mostly, this will lead to civil disputes, but occasionally, the consequences will be tragic.