Reading the list of benefits of ‘board books’ – the packet of documents that make up board papers for each meeting - from board portal providers, you are in no doubt that it is the way of now and the future.
Your legal and IT professionals will sigh in relief, your board secretary and chief executive will feel more in control and less stressed, and the chief financial officer may (or may not) look forward to some change at the end of the year. Meanwhile, your directors will smile at the prospect of not having to lug around heavy folders and boxes or be responsible for leaving papers in not very secure places like the back seat of the car.
Like any change programme, there are numerous considerations for shifting away from paper- based governance. The ones most raised by directors are around security, hardware, support and readiness to convert to e-governance. So without getting too technical, here’s what you need to know for starters.
Technology folk will tell you that getting hacked is only a matter of time. Thankfully, the technical, accounting, legal and auditing professionals have established standards that verify the infrastructure and operating procedures of companies that host our data. This is important because organisations need to know that, without exception, their sensitive data is backed up safely and is secure both in storage and when it is being accessed or downloaded.
Board portal providers such as NZ company Diligent with Boardbooks, and North American solutions such as BoardVantage, NASDAQ’s Director’s Desk, BoardEffect, BoardWorks and others, all have proven SAS 70 Type 2 certification. Translated into simple English, this means they are audited annually against an internationally recognised auditing standard that reports on the controls that the service organisation has in place and on how effective those controls are.
Many hold additional certifications such as SSAE 16, which is said to replace the SAS 70, or ISAE 3402 Type 2 (SOC 1) that shows that the provider meets international audit and accounting reporting standards for service organisations.
But wait, the technology bit continues. Most solutions are PC, Mac or Linux compatible, however the functionality may vary depending on whether you are accessing from a desktop or a tablet. Wise voices advocate for being hardware agnostic and for selecting the solution that best meets your organisation’s needs.
In discussions on the functionality offered by board portals, directors focussed on features like making private or shared notes directly on documents, secure chat and threaded discussions, timed access to documents (useful if you lose your iPad) and 24x7 technical support.
So are your directors ready to convert to e-governance? Not to be under-estimated, their readiness will have a direct impact on the success of your investment in e-governance. Some say the move should be driven by the Chairman or CEO. Whoever champions the investment, it needs to be underpinned by a well-thought out communication plan to address all sorts of concerns from technophobia to how the live board meetings will run from now on.
Understandably, providers are keen to help you work through those hiccups. Paper will not completely disappear from the first e-governance style board meeting but it is good to have a goal to work towards over the first period of use.
So, will e-governance solutions change line items in constitutions around minimum number of days for distributing board papers before meetings? And will governance shift to more real-time governance because board portals facilitate real-time resolution of issues?
Sehaam Caselburg is chair of the communications sub-committee, Institute of Directors Waikato
- Waikato Times