Boards have never been under greater scrutiny and time-poor directors are seeking ways to perform their roles more efficiently.
Today’s sophisticated board portals can play an important role in helping directors to meet the ever-increasing demands being faced by leadership teams.
“Board portals have come a long way since their inception as sophisticated and secure document repositories,” says James Harley, head of product strategy at Nasdaq Governance Solutions. “Once they moved the preparation and facilitation of meetings from paper-based to digital, they transitioned quickly to effective and versatile workflow tools.”
Simon Berglund, senior vice-president and general manager (APAC) of governance, risk and compliance (GRC) at software company Diligent, says seismic organisational shifts can occur as a result of cyber attack, geopolitical turmoil, climate change or the aftershocks of economic or wide- scale health crises.
“To add even further pressure, stricter corporate governance rules have forced boards to a greater level of accountability,” says Berglund.
He points out that board portals now can automatically manage and streamline tasks that might take up a director’s or corporate secretary’s time, such as managing agendas, annotations, documents, discussions of board meetings and board meeting minutes.
“They also enable secure collaboration wherever you are, which is crucial in today’s global and remote business landscape.”
Board and committee chairs can use the technology to plan ahead to help ensure that the board is operating effectively.
“This includes thinking about the optimal committee structures, the composition of the board and its committees, setting meeting schedules and agendas, board assessments and engagement activities for the entire board calendar,” says OnBoard co-founder and CEO Paroon Chadha.
An overview of GRC
Drawing from industry and internal data, sophisticated portals provide comparative insights into the performance and health of the business.
“They can also help boards to keep pace with evolving governance requirements,” says Berglund. “New-generation software can connect to an organisation’s governance, risk and compliance (GRC) platform to provide a unified, easy-to- comprehend overview. Transparency is also baked into board portals by providing stakeholders with instant, from-anywhere access, and the ability to collaborate on relevant board materials, documentation and meeting minutes. By building a sense of trust and confidence among board members, shareholders and regulators, the board can demonstrate its commitment to accountability and good governance.”
Portals can also support the dynamics and culture of the board.
“A board portal that offers the opportunity to rate or submit post-meeting feedback anonymously helps governance teams to collect insights that improve the output and performance of any board, as today’s stakeholders would expect,” says Chadha. “Portals can also highlight each board member’s unique connections and professional experiences.”
Varying uptake
Despite the promised benefits, relatively few boards have portal software in place.
“According to more than 1000 responses in our global survey, 63 per cent of board members and professionals rely on ‘homegrown’ systems — a patchwork of platforms, technology and media such as email, PDF and shared drives for supporting board interactions,” says Chadha. “Approximately 14 per cent of respondents still rely on printing and distributing paper-based packets. These archaic processes can be frustrating and create fault lines for increased liability for everyone involved.”
Brett Herkt, founder and CEO of BoardPro, expects the uptake of board portal technology to follow a basic adoption curve, starting with large corporates and making its way down through the market.
“We specialise in providing board portals to small and mid-sized organisations,” he says. “By the time you get down to the smaller not-for-profits (NFPs) and SMEs, uptake is less than one per cent.”
Directors on the boards of smaller organisations can face a unique set of challenges. “As many are working on a voluntary basis, with little or no experience of corporate boards, they can find themselves bogged down in operational detail,” says Herkt. “A portal can help by reducing distractions and giving back time to focus on more strategic matters. We supply a highly customisable best practice agenda directly in the software, which prompts directors to prioritise strategic matters. A built-in workflow will lead them through the whole process, from agenda building and developing a board pack, to approval of the minutes.”
Customisation is also critical for larger organisations. “This can include integrating with existing systems, such as digital signature tools, collaboration tools and entity management platforms,” says Harley.
“Portals can be adapted to different governance structures and used among the main board and its subcommittees as well as any subsidiaries and other entities an organisation may own. Boards can find the best fit by assessing their requirements, conducting demos and trials, and seeking recommendations from peers.”
Cybersecurity
The sensitive nature of board and committee documentation demands the highest level of security, including protection against cyber threats. Harley recommends that boards considering a portal should check these measures are in place:
Encryption techniques to ensure that information remains secure even if it’s intercepted by unauthorised parties
Multi-Factor Authentication (MFA) such as passwords, biometrics or one-time codes to help prevent unauthorised access to board portal accounts
Access controls to allow administrators to define permissions and restrict access to specific documents, features and functionalities
Regular security audits to identify vulnerabilities, assess compliance with security standards and regulations, and implement measures to mitigate risks
User training and awareness for board members as well as staff to reduce the risk of security breaches caused by human error
Compliance with industry standards such as SOC 2, GDPR and ISO 27001 to ensure the highest level of security and compliance with data protection requirements.
Herkt notes that directors present the single biggest security issue for boards in the small and mid-sized market.
“When they receive unencrypted documents via email and download documents to their local device they become the most likely point of failure,” he says. “The majority of board software providers have enough security, out of the box, to reduce that risk.”
Likely trends
Herkt expects to see a second wave of product development that will broaden the appeal of implementing portal software.
“The first wave has focused on workflow efficiency gains — from administrators producing board packs to board members preparing for a meeting,” he says. “I believe the software industry will next codify and productise corporate good governance practice for the entire governance market, including smaller organisations.”
It is likely that this — and any other board portal trend — will draw on some level of artificial intelligence (AI).
“This is the decade-defining technology shift in governance,” says Chadha. “Traditionally, software supported what humans did, but now software has started to do what humans do. The opportunities here are nearly boundless, even in the confines of the governance work.”
Boards investing in a new portal should confirm that it is AI-ready.
“It should already be capable of providing granular user-access controls and enterprise-grade security, and support various content and file types,” says Chadha. “Further, it should offer a platform-neutral approach with guaranteed isolation from publicly accessible AI models to maintain confidentiality.”
Chadha is also excited about the possibility of immersive spatial computing experiences that use new technology, such as Apple’s Vision Pro headset.
“With the promise of an infinitely virtual desktop, a well-designed board portal application can now be deployed in augmented-reality environments,” he says. “This could allow boards and directors to explore environments, either independently or together as part of a board or committee meeting, which were previously inaccessible due to cost, risk or distance.
“Imagine a world where you could experience firsthand the operations of a new offshore drilling rig, tour a critical overseas manufacturing facility or simply visit the newest office location to gain fresh perspectives on how the organisation functions.”
This article first appeared under the headline 'Digital Enablement’ in the April 2024 issue of Company Director magazine.
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