The start of a new year is the ideal time for boards and company secretaries to ensure corporate reporting tools and approaches are up to date. But with a growing number of platforms to consider, where to start?
Investing in a board’s efficiency and effectiveness is probably one of the best investments an organisation can make. As Steve Pell, managing director of Melbourne-based BoardOutlook, founded in 2018, says, “An organisation cannot grow in any aspect faster than its board.”
Board reporting software platforms are aimed at boosting efficiency and effectiveness by getting the right information to the right people when they need it in order for them to make the best decisions. Board software tools and management systems are designed to combine the process in one place, rather than having various email and hard-copy collections of documents.
However, Pell says boards actually need to consider broader questions when evaluating options. “The biggest cost in this market is not what you’re spending on a portal, it’s the cost of your directors’ time. If you’re forcing directors to learn a new system to save money, it’s wasted because you’re not going to get the best out of just any platform. Consistently using systems that allow directors to focus on the challenges before them is sage advice.”
That said, Pell argues board portals are yesterday’s discussion and the focus has shifted to the best use of technology to lift board performance. “Diligent has largely won that market,” he says. “There are others around the edges, for example, not-for-profits (NFPs) that don’t like costs. Directors, chairs and company secretaries are thinking about the next generation of technology that supports board performance. It’s not about paper sharing, it’s about how we get better together. It’s not just the information angle, but the performance angle that helps us take ownership and drives continuous improvement.”
There has been strong adoption at the top end of boards listed on the ASX of tools that track the performance of the board, CEO and chair. They enable director 360s and board reviews, and provide skills matrices.
“These are tools that previously inhabited Excel and have been painful for directors to work through,” says Pell. “We see the next generation as taking these into standardised platforms that really improve the board experience and give insights and learnings of all markets to help improve board performance and show chairs what’s coming over the horizon.”
The AICD offers its Governance Analysis Tool — an external, “guided” self-assessment to facilitate collective self-reflection by a board of its governance practices.
Tips for choosing software that’s right for your board
- Consider the needs of all stakeholders — board, management and administrators. Each facilitates the success of the other. Avoid solutions that focus on one stakeholder at the expense of others. For instance, many corporate portals assume a highly capable company secretary is in place and don’t provide the workflow functionality that really benefits small, mid-market and NFP organisations.
- Road test your shortlisted providers thoroughly. Do a free trial. Avoid 14- day trials. You want a minimum of 30 days because that’s how long a board cycle will normally run. Some providers demonstrate their products and don’t make a full unfettered trial easily available.
- Actively test your favoured provider’s customer-support function — is it fast, responsive, quality and locally based? Does it operate in your time zone?
- Check the price tag before you start a trial. Prices for board-management tools can vary hugely and only a few, such as BoardPro and Boardable, advertise their prices. So check first before you get invested in the features.
- Check the platform’s cybersecurity abilities — this is a foundational issue.
- Consider data sovereignty and local requirements. Is your data stored in your own country?
- Do your homework on a few different options and don’t rely on the information given to you on a company’s comparison of their competitors. It’s often out of date or false. It can also be influenced by their sponsorship.
- Speak to other directors and company secretaries.
Coping with COVID-19
COVID-19 affected the portal market as face-to- face meetings fell away. Brett Herkt MAICD, co- founder and CEO of NZ company BoardPro, says most providers worked on integrating their board software more seamlessly with videoconferencing software. “We rolled out features like flying minutes or circular resolutions, which allow board meetings to happen in between formal meetings. We’re also rolling out digital signatures and innovations in our board pack where you can see the difference between the first published versions and the final ones — and what changed.”
Colin Panagakis, senior account executive at OnBoard, says COVID-19 has forced people to use the board portals more often. “Board members relied a lot more on the board portals to give them their confidential information so that they could read packs, make notes and address people from wherever they were because travel wasn’t happening,” he says. “It has expedited adoption of portals, but the actual products themselves haven’t improved.”
Even with face-to-face meetings coming back, the digital approach is here to stay. “It makes things a lot more transparent,” says Panagakis. “With Zoom and Teams calls, there’s a lot more focus on respective agenda items. On the preparation side, there have been changes. Before, there was a lot involved where there would be, say, two people in a room collating the packs. People can do that remotely now. There are huge efficiencies going on — we’re not going backwards.”
According to Herkt, there has been a gradual consolidation of the corporate portal market in recent years and it is saturated at the top end. “Diligent has acquired half a dozen or more of its competitors in the enterprise market,” he says. “It actively pursues acquisitions, but there are still a large number of offerings available. However, for Australian boards, there are still a relatively small number of board software providers in the SME and NFP space.”
US venture capital firm Bessemer says BoardPro and the US-based Boardable are dominant competitors in this space. But Herkt says the market is still wide-open. “Ten per cent of my target market in NZ is using our product. Of the other 90 per cent, 89 per cent of those will be using desktop software, email and Dropbox.”
Panagakis maintains Australia is spoiled for choice, but lacks quality products, especially in regard to board engagement and board metrics. “Some products were designed 11 or 12 years ago and are nearing their end of life,” he says. “Then you have OnBoard, which was rewritten from the ground three years ago and is much easier to use. A lot of companies still use tools like Dropbox. The journey is different for every organisation.”
Making it work
Having the right technology is one thing, but other factors are crucial in ensuring efficient, effective board reporting, minute-taking and meetings. Herkt advises directors to give management a clear expectation of the future they wish to create, against which they can report progress.
This should include organisational purpose, vision and strategy. “Many organisations don’t understand how to do this, particularly smaller ones and NFPs,” he says. “Once you know where you’re heading, boards should help management establish a reporting template that focuses attention on key matters in two pages.”
Herkt is a staunch advocate of the “less is more” principle when it comes to board minutes. “We hear of boards reporting hundreds of pages,” he says. “Basically, you want to focus minutes on decisions, with just enough supporting detail to explain why you took that decision. Minutes don’t need to be much more than that. Unfortunately, many boards transcribe everything and have volumes of minutes. That confuses readers.”
Also important, says Herkt, is having a capable, experienced chair with the trust of board and management, who knows how to run a tight meeting. “Not having a good chair is probably the one thing that trips up meetings.”
Before choosing a portal, he says boards should consider the organisational context. “Think about this before you adopt any technology. Does the board have mission-critical strategic decisions to make that demand focus and to streamline board papers and administrative overheads? Also, take into account the readiness of board members to adopt the technology.”
There are various lists and rankings of the available technology, but Herkt advises searching Google for independent reviews and commentaries. Affordability is important, especially when choosing between a corporate portal (for a large enterprise) and board software (for SME or NFP) options. “Most portals don’t list their price, so you know that it’s expensive enough to justify talking to a salesperson,” he says. “If you’re an SME or NFP, and the price is listed, you’re in business. If the price isn’t listed, you’re probably going to have to justify whatever the added benefits of those products are.”
Panagakis notes that cybersecurity is an increasing area of concern and boards should also be asking where their data is kept, as data sovereignty is a growing issue. “Look at the software accreditations. Does it have two-factor authentication and other safeguards? And obviously, you want your data kept in Australia.”
Some companies mentioned in this feature may have advertised in Company Director, but have had no involvement in determining editorial content.
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