Martyn Chapman, Head of Strategy at Nasdaq Governance Solutions
By Martyn Chapman
Governance professionals have witnessed first-hand the transformation of how boards communicate, with the increasing shift to “paperless” board meetings. Directors have turned away from printed documents in favor of digital information that is easy to share and accessible on mobile platforms like board portals. This is happening not just by outside forces: an increasing number of directors joining boards today are more comfortable with technology.
As governance-specific software continues to enhance the ways in which companies operate, boards need to keep pace to ensure they are communicating in the most efficient and preferred methods possible. Directors are essential to driving this adoption.
Digital resources for corporate governance have streamlined board book creation and, importantly, tightened information security. The benefits to this technology are clear: a digitized board is freed from cumbersome administrative processes and can instead focus on core fiduciary duties like financial oversight, strategic planning, and risk management.
Unsurprisingly, myths on the efficacy of boardroom technology abound. Meeting-related activities, such as the development of digital board books, online agendas and meeting minutes, can be assembled through board portal technologies. These tasks, however, are merely a sample of the potential that portal technology holds for today’s boards, including allowing board directors to communicate between meetings, share and edit documents, carry out surveys, review upcoming events and schedule meetings for committees.
Cybersecurity and Risk Compliance
The noted rise in cyberattacks can seem overwhelming for organizations and their board directors, who are responsible for managing enterprise-wide cyber risk. Cybersecurity issues are complex and technical, raising anxiety that board directors don’t have sufficient expertise to serve their risk oversight function. But board directors can be prepared to mitigate these risks.
Paper documents can get misplaced, meaning sensitive or proprietary information can get into the wrong hands. Even email has risks, opening board directors to a slew of malicious third parties and cyber threats. Technology can provide a secure, centralized space to store documents. Permission settings can be added to control who has access to certain files.
Oversight of the organization’s cybersecurity program is also critical. Cybersecurity governance should address unforeseen vulnerabilities, threats and attacks. It’s helpful to use third parties to assess the maturity of the organization’s overall information security program. The third party should conduct interviews with stakeholders as part of their assessment process and compile a board report that compares the organization’s threat risk against peers in its industry.
To keep updated on cybersecurity risks, board directors should consider including cybersecurity on the agenda at full board meetings as frequently as necessary based on the level of risk the company faces from data-related attacks, and as specific incidents and situations warrant.
Board portal technologies offer ways to gather conflict of interest statements, eSignatures, D&O questionnaires and online votes. Carrying out these activities in a secure environment, like a board portal, reduces risk and also streamlines the processes, thereby increasing data integrity for an organization.
Board directors can regain valuable hours by using board portal technologies. Since all key documents are stored in one place, directors simply access what they need to see, make changes that are immediately noted and look at materials to prepare for the next meeting. This enables directors to focus on their core duties during meetings, including financial oversight and risk management.
Ensure technology is part of your board culture, especially as you on-board and train your newest directors. The amount of time it takes for directors to get acclimated to their role can have a big impact on the effectiveness of board meetings. In a perfect scenario, new directors could read through some documentation, shake a few hands and be instantly productive at their first meeting.
Organizations can take steps to make it easy for board directors to adopt board governance technology. Training sessions quickly provide the information needed to start using the software. Best-in-class solutions are designed to have a streamlined and intuitive user interface, so board directors who use the portal to communicate frequently will become familiar with the software quickly.
Martyn Chapman is Head of Strategy at Nasdaq Governance Solutions, which offers enterprise governance software for boards and leadership teams.
John Jannarone, Editor-in-Chief