Sector specialists say that board management software can elevate board performance, streamline governance and make it easier to meet stakeholder expectations.
Board management software can elevate board performance and make governance more robust, however, many companies are not utilising some of the newer tools available. According to BoardPro founder and CEO Brett Herkt, less than five per cent of the 60,000 small/medium businesses and not-for-profits in Australia are using software created specifically for boards. Among larger and ASX-listed companies, he estimates that the figure is much higher, at around 90 per cent; and within mid- market companies, he estimates penetration rates in Australia at about 30 per cent.
James Harley, principal product director at Nasdaq Governance Solutions, notes that board portals are now well entrenched in how boards work, and board members are spending more time than ever servicing the boards on which they sit. This requires board service portals to be easy to use and intuitive, with consolidated views of everything they need to know, see and action in one place.
“There is a bigger shift to a reliance on a board portal, not just for preparing and facilitating the meeting cycle, but as a go-to resource for board members at any time to help them be successful in their role,” he says. “They’re a single source of truth for board members.”
A spokesperson for OnBoard flags the security and efficiency pluses of portals. “They are a secure environment for administrators and board directors to access meeting materials, communicate with each other and execute their governance responsibilities. By combining new mobile hardware with rapidly improving cloud technology, board management software replaces the old paper/printing/email regime.”
Recognition is growing that performance tools such as board portals are preferable to using an amalgam of paper documents, PDFs and SharePoint files, which are also less secure from a cybersecurity point of view. It also avoids situations whereby directors turn up to a board meeting to discover last-minute changes and additions of which they are not fully abreast, yet must form decisions about.
“Organising and conducting board meetings can be tedious,” says Tanya Gleeson, enterprise account executive at board management software company Azeus Convene. “Board management software provides facilitators with the tools to easily schedule meetings, build the agenda, take minutes and notes, and even conduct voting remotely.”
It also eliminates the need to use disparate tools such as videoconferencing, note-taking and scheduling software, but can be integrated into existing calendars and email servers. The board meeting experience is more user-friendly and saves a great deal of time in administrative preparations.
However, for many boards there can be a perception that the costs are too significant to justify the investment.
“The board portal market is a relatively new phenomenon,” says Herkt. “It only started around 15 years ago with the likes of Diligent creating board management software that catered to the top end of the market. Those products cost tens of thousands of dollars.”
It is only in the past five or so years that substantially cheaper products have been released. More accessible products such as BoardPro now provide accountability-boosting features such as tracking data, board reviews, refreshed skills matrices and director 360s.
For example, BoardPro allows a board member to pick a strategic topic — such as shareholder expectation on ROI — and track it across board packs, minutes, votes, decisions and interests. Previously, such a search would be time-consuming and would likely turn up less than comprehensive results.
“If you strip down our product to its crudest components, it is a workflow tool with a document repository,” says Herkt. “We believe everything in the world that can be done by software, should be done by software. A computer program like ours carries out the rudimentary, repetitive tasks so the human brain doesn’t have to.”
Increased stakeholder engagement
Harley notes that boards are now expected to engage with stakeholders such as customers, employees, investors and the public in order to understand their expectations and align the company’s decisions with their interests. He says board portals and dashboard solutions can help demonstrate performance to both shareholders and stakeholders, because they provide real- time access to critical information, including financial statements and performance metrics. “Stakeholder engagement helps boards to make better decisions that align with the company’s objectives and long-term goals,” he says. “There is a growing demand to include stakeholder considerations within the decision-making stored on the portal. It gives us the ability to showcase which stakeholders were considered during the different stages of the meeting lifecycle. As we progress with developments in AI, this could be a method for looking at and scoring all documentation for where stakeholders have been considered and the impact of decision-making on these groups.”
Interacting with stakeholders in this way also helps boards with risk management. “By proactively engaging with stakeholders, boards can mitigate risks, anticipate potential challenges, and identify opportunities for growth,” says Harley.
Such solutions give access to news and content, which helps directors to keep abreast of top-of-mind topics for stakeholders. Ready access to detailed minutes, accurate records and supporting documentation is also helpful.
Harley adds that the expectations of portals are increasing in tandem with increasing pressures on boards. “Portals are expected to not only facilitate the meetings, but to aid and assist board members with ongoing education, performance and compliance, as well as keep them up to date with relevant news and intelligence.”
This in turn will aid in a number of board objectives, like reputational management, by demonstrating transparency, responsiveness, and social responsibility, regulatory compliance requirements and effective business strategy, he says. “By understanding the needs and expectations of stakeholders, boards can make better decisions that align with the company’s objectives and long-term goals.”
Harley emphasises that directors should also consider industry-standard security requirements to protect sensitive information plus integration with related software tools such as document management systems.
This article first appeared under the headline 'Booster Shot' in the May 2023 issue of Company Director magazine.
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