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JANAURY 2008 | |||
Inside:No Paperwork? Board Portals Might Be the Answer A Word from the President - The Society's David W. Smith . Events - The Society is hosting the Essentials Seminar in Orlando, Florida this month.
No Paperwork? Board Portals Might Be the AnswerBy Alex Sodi There seems to be little doubt that Corporate Secretaries eagerly await the day when they and their staffs no longer have to publish and distribute board books manually. But there's also little doubt that some corporate directors — set in their ways — may initially push back against the growing tide of board portal technology. According to a 2006 survey by the Society of Corporate Secretaries and Governance Professionals, 19 percent use some form of web portal or electronic means of delivering board materials. At that time, a whopping 60 percent of those Corporate Secretaries not delivering materials electronically were considering it. Directors, though, are another story. Perhaps these directors don't realize the chaos and dramatic (sometimes heroic) efforts made in preparation of each board meeting, and even for some board committee meetings. It's possible that they don't realize that small forests everywhere are quivering at the thought of another board meeting. It's likely that these directors don't fully realize that they could have access to board meeting materials well in advance of their meetings, as opposed to only a week before. Although there are no surveys of corporate directors' feelings about web portal technology, there's a general consensus that many corporate boards are populated by executives that are all for technology, as long as their assistants and secretaries are user friendly. Alas, this primarily 55-and-over crowd started in business when the IBM Selectric typewriter constituted cutting-edge technology, and who stared amazed at a cylindrical fax "modem" that spun hundreds of times a minute to send a document. The current crop of corporate directors' apprehensions about the technology is not complex. Simply, these folks fear not being able to access critical documents when needed, and have more faith in hard copies and an overnight delivery service. At Diligent Boardbooks, for every five reports we hear about corporate boards' ignorance of technology, there's one report of these directors whipping out Blackberries and laptops at every chance. Strategies for securing a technology 'Yes' aced with what some have called a 10- to 20-year wait for a new generation of technology-savvy board members to form a majority, a growing number of impatient Corporate Secretaries are taking matters into their own hands by making it as easy as possible for directors to understand the benefits of board portals and to transition to these secure Internet-based sites which can be accessed from anywhere there's an Internet connection. Based on feedback from Corporate Secretaries at several of Diligent Boardbook's clients — who requested to remain anonymous — the following are strategies that helped them gain support for web portal implementations. Create advocates in key departments. There is strength in numbers, especially when those numbers include the CEO, general counsel, corporate governance officer, chief information or chief security officer. You may even find an advocate or two among your current board. The CIO and CSO can provide expertise with regard to information and security breaches caused by traditional board book distribution methods, which sometimes even includes faxing material to a hotel's unsecured business center. General counsel and corporate governance officers can vouch for the reduced liability that comes with having better prepared board members, especially in the ongoing wake of Sarbanes-Oxley. Just testing the water for executives who can back your efforts can yield valuable information about possible objections from the board. Emphasize "transition," not an abrupt change in procedure. Be realistic. While many Corporate Secretaries would like to banish paper boardbooks within hours of implementing the technology, in all likelihood, it's not going to happen. Pushing for a dramatic shift in the way board books are compiled and distributed is a sure way to create fear and uncertainty among directors. Far from "losing" paper board books, it should be emphasized that technology is being "added" to the mix, and with it the ability to access board material from anywhere, to search archived materials, to review up-to-date policy and procedures, and to vote on resolutions. Present to board members with your potential technology provider. Have the web portal provider — whether it's an outside firm or your IT department — available to answer questions directly from the board when the board portal is proposed. Directors most likely won't view you as a technology expert, and would rather hear from these experts alongside you. Launch the product internally, with limited number of directors at first. Corporate secretaries should consider implementing the system in stages. The first few meetings should include a paper copy until the board gets comfortable viewing materials online via a board portal. Ultimately the goal is to combine the best of both worlds — the traditional approach to "reading a book" and the efficiencies and convenience of technology. It is important that the board portal is easy to use and looks like a book (not a complex website cluttered with information). Even the smallest of issues could confirm a director's apprehensions. Working with tech-savvy directors will allow a corporate secretary to fine tune the process. When used solely as the engine to create hard copy, board books can still yield cost savings internally. When ready, Corporate Secretaries will be able to provide quantifiable numbers with regard to cost savings and more timely access to materials. A timeline, showing when materials were actually ready vs. the date they were distributed can be a powerful tool. Use breaking events as teaching opportunities. Events that call for emergency meetings and the immediate review of materials are perfect opportunities to illustrate the benefits of a web portal to a board. Even last-minute insertions and addendums that are sent to directors before just about every board meeting, provides an opportunity to educate directors about how technology can eliminate the chore of inserting these materials and reviewing them with little time. Don't overwhelm directors with features, functions. Just as successful Corporate Secretaries have used a slow transition strategy to ensure web portal implementation; they also suggest keeping the technology simple, at least at the outset. Directors willing to dip a toe into the tech waters may be overwhelmed by too many functions and features. The board portal, at least at first, should merely replace the hard copy board book. And for directors, "online help" is the equivalent to "no help." Make sure there is live support 24/7 not only for the web portal, but for all tech needs. Conclusion As every company and board of directors differ, best practices which may help some Corporate Secretaries pave the way for directors' approval to implement board portals also varies. Used singly or in combination, however, these approaches should provide Corporate Secretaries with greatly improved chances of moving forward with a technology initiative that they recognize as beneficial to their productivity as well as the board's productivity. Alex Sodi is president of Diligent Board Member Services (www.diligentboardbooks.com), a provider of digital boardroom solutions. |
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