cloud

Board management systems and portals provide a virtual platform for the board to hold meetings, record minutes, share and review documents, and vote on business matters. Now they are moving beyond document distribution to become central to the organisation, facilitation and recording of board meetings.

The COVID-19 pandemic increased the importance of having reliable, efficient systems, with directors needing a way to work and meet virtually and online during lockdowns and travel bans. Directors say portals can help to facilitate efficient and well-run board meetings. But even with the added functionality they are not a “silver bullet” to ensure good governance.

“Essentially, directors don’t want to spend huge amounts of resources just on managing their board pack. How many features do you need?”

Ruth Medd MAICD, chair Women On Boards

The basic elements

At their most basic, board management platforms replace the traditional board pack — the sheath of documents once couriered or emailed to directors. Instead of the process of assembling the board reporting pack, company secretaries can collate the required documents in a board portal and provide directors with access to the documents through either a mobile device or a laptop. It’s less cumbersome than dealing with physical papers — although some directors still print out items from their board packs. Additionally, the systems act as a repository of documents from past meetings.

Portals store documents securely in the cloud and provide directors with access via password. The distribution of documents is a lot more secure than emailing documents, which can leave organisations vulnerable to security breaches or hacking.

Jennifer Robertson FAICD, deputy chair of Brisbane Marine Pilots and a director of the Queensland Fire and Emergency Services, rates COVID-19 as the “great precipitator” of the board platform thanks to safety concerns, the lack of travel and need for virtual meetings. “It’s been a real lightning rod to make sure all directors just get on and start using these platforms,” she says.

“Having a board portal for the purpose of being a company director nowadays is essential. Being able to have your papers there in that online platform is really critical to you being able to do your job, particularly if you’re quite mobile,” says Robertson, also a director of the Queensland Independent Schools Block Grant Authority and managing director of Board Matters.

Robertson uses a number of different systems. “The last thing you want to be doing is carrying around a telephone-sized book worth of board packs with you in order to do your job,” she says.

A key feature of a board portal for her is whether it can be used intuitively and whether it will make sense to all the different backgrounds gathered around the board table — lawyers, engineers, accountants and managers. She has experience of one portal that was so difficult to use that she asked the company secretary to email her PDFs of documents instead. In February, Board Matters announced a relationship with Nasdaq Governance Services, a business of Nasdaq Inc, which operates its own board portal and collaboration software, Boardvantage.

Most portals also allow directors to make notes on documents ahead of meetings and to share them with other directors. This is an important feature for Robertson, but with a caveat — the mark-ups need to stay on the documents even if the documents are updated. She recalls using one readily available board software system that missed a basic element. “I’ve had times where I’ve gone through and read this paper, put all my thoughts down and gone, these are the things I want to raise,” she says. “Then I’m told the board pack for the meeting has been updated and I’ve lost all my notes.”

Allowing directors to vote for resolutions and keep records of voting are also useful features, she says. Those are the basics, but many board portals are moving beyond just document distribution.

Managing the meeting

Workflow tools can help to organise a company meeting — from the collation of documents to agenda setting and then to board minutes at the end of the process. “We provide the company secretary, the administrator or the CEO with the ability to wrap the whole board process from one end to the other in a piece of cloud software... with all sorts of automation and streamlining benefits,” says Brett Herkt MAICD, co-founder and CEO of BoardPro.

Users type the meeting agenda into BoardPro’s Agenda Builder and then drag the relevant documents onto the agenda. After the meeting, the company secretary enters the minutes against the board agenda. “Now you’re capturing all of the information pertaining to the board process in a single place, so when a board member does a search on any individual topic in our software, it will give you the ability to see documents, minutes, decisions and agenda items,” says Herkt.

If the board has made a decision, for instance, then it will be added to the board’s “decision register”, which records decisions and actions. Effective governance is essentially a workflow like any other business function, he says. However, larger organisations often don’t need all these functions because they have dedicated resources such as a full-time company secretary who can manage the meeting process.

BoardPro is aimed at resource-constrained small and medium businesses and not-for-profits — so it tries to automate the process as much as possible. It also has a Flying Minutes function, which allows boards to vote on decisions outside of formal meetings — this feature was in strong demand during the pandemic.

Diligent, the brand used by many listed companies, provides similar dynamic agenda- setting capabilities, which allow board minutes to be assembled against the agenda, signed off on by the board then converted into a workflow — or to-do list — after a meeting.

Liam Healy, senior vice president and managing director of Diligent, says directors at the best- performing boards are drawing on large amounts of data to make decisions. “They’re looking for benchmarking, they’re looking for all of the information that analysts and/or lobbyists already have,” he says. “So the question is, where do you get that information?”

The Diligent portal collates and provides information such as compensation benchmarking, remuneration, cybersecurity and risk scores. It also offers integration of video meeting tools such as Zoom, Webex and Microsoft Teams, to allow for virtual meetings.

Healy acknowledges that at the upper end of the market, Diligent is one of the more expensive board portals and that not all boards will need these functions. He says it is best to start with a basic offering from a board portal provider and allow for the board to upgrade and add new functions as its governance maturity evolves, rather than have to switch to a more advanced provider. However, Healy also cautions that many board management systems are commoditised products — “some would even call them glorified PDF readers” — and directors need to look for additional functionality that sets them apart.

Enhancing governance

At their core, board platforms are about getting the right information to the right people at the right time so they can make the best decisions. Board management systems aim to bring the whole process into one place, rather than, say, having email and hard copy collections of documents and directors contacting each other about the agenda via text or WhatsApp. Directors know where they can easily access all the information, notes, communications and decisions in the one place. For many, the basic process of streamlining document collation, reading and annotating makes for more effective board meetings and hence, governance.

Winn Jewett, co-founder and CEO of BoardSpot, a governance portal that focuses on NFPs, says that board portals, by virtue of the emphasis on meeting processes and organisation, can help focus directors’ minds on governance. Just going through the process of setting up a board portal means an organisation is approaching the issue systematically and taking a first step to improve its governance.

BoardSpot will soon offer dynamic agenda setting and minutes creation, but has refrained from adding on too many extra features so as to keep its use simple. “We emphasise usability and ensure it’s top of mind when we’re building out a new feature,” says Jewett. “We’re keeping an older generation in mind, as well. A lot of board members are not so tech-savvy, so we’re trying to keep things as simple for them as possible.”

But as much as board management software and portals facilitate efficiency and good governance, they aren’t silver bullets. Depending on an organisation’s governance maturity and comfort with technology, boards should invest in training to ensure the organisation can best use the technology.

“Directors should assess the degree of governance maturity and the comfort as to technology,” says Herkt. “If there are any gaps there, they should invest — that’s pretty cost-effective — from $500 to a maximum $2000.”

Portals have made the job of assembling board packs much easier for management and company secretaries, but that has a downside, says Robertson. It can increase the temptation to upload extraneous information, ending up with a huge board pack for every meeting. This creates another problem — if a document is in a board pack, then in the event of litigation, courts will usually decide directors should have read it. Some portals overcome this problem with a “reading room” into which additional material can be placed, but not included in the board pack.

“The platform is an enabler of good decisions,” says Robertson. “However, if garbage is going in, it’ll be garbage out. It doesn’t absolve the board and management team from making sure the papers are structured well, that they have a solid business case.”

Robertson also prefers board portals with easily accessible board policies and board charters, so directors can check them in meetings if need be.

Australian-designed portal Boardtrac eschews extra bells and whistles in favour of functionality. For instance, it doesn’t have an instant messaging function to allow individual directors to contact each other. Marketing manager Chris Dimopoulos says this can have governance advantages because individual messaging promotes “little segregations of the board” and communication should be at board level. “We don’t have that functionality because we don’t want to encourage bad governance in your board management.”

Who decides?

It often falls to the company secretary to compare different board portals, but their choice might ultimately be limited by the directors’ preference for using what they’re already familiar with.

Ruth Medd MAICD, chair of Women on Boards, the Australian Health and Science Institute and the Australian Chocolate Company, and a former company secretary of Telstra, is a director who prefers the tried and true.

“If you’re a director like me — and I’m on six boards — you would probably say, ‘OK, company secretary, you’ve done your analysis and it’s cheaper to buy another portal, but I actually use Diligent at my other board and I’d much prefer to use that because I know how to use it’,” she says. “So you’ve got to actually overcome the cultural bias of directors. In a sense, it’s not so much what is the best portal for us. It’s what is acceptable to the directors, generally speaking.”

Like Robertson, Medd is looking for a board platform that manages the basics — it needs to be intuitive, not break down, work across various devices and not overwhelm directors with features that they won’t use.

“Essentially, directors don’t want to spend huge amounts of resources just on managing their board pack,” says Medd. “How many features do you need?”

“Being able to have your papers there in that online platform is really critical to you being able to do your job, particularly if you’re quite mobile.”

Jennifer Robertson FAICD

Company director view

For Susan Forrester AM FAICD, board portals are all about governance.

Susan Forrester AM FAICD, a director of consumer lender Plenti, telecommunications provider Over the Wire and G8 Education, and chair of lottery game reseller Jumbo Interactive, says boards have one role — to make decisions — and the only way they can do this is with good information.

“It’s more likely that information will be of a higher quality if it’s either in real time or close to real time and it is delivered to the board in an orderly, efficient, organised manner,” she says.

This is what board management systems provide over the traditional board packs. On receiving a text from the company secretary telling her the board papers have been loaded onto the portal, Forrester jumps in to work out how much time she will need to devote ahead of the meeting — the whole weekend for “hairy issues” or Tuesday afternoon for a “monitoring meeting”.

Ahead of the meeting, Forrester uses the sticky notes function to highlight issues and questions for the meeting. She likes portals that have an annotation page, which pulls together all her notes rather than requiring her to scroll through 900 pages of documents.

Forrester, also an advisory board member of the governance- focused Diligent Institute, draws on the portal’s’ resource centre or library to find policies, procedures and white papers.

“If I was going on a board that didn’t have one [a portal] it’d be a condition — either you get one or I’m not coming on,” she says.

“Directors should assess the degree of governance maturity and the comfort as to technology. If there are any gaps there, they should invest.”

Brett Herkt MAICD, CEO BoardPro

What to look for in board management software

How well does it do the basics — storing board packs and providing access to documents and other materials?

Is it easy to use and intuitive?

And does it make sense to directors from non-technical backgrounds?

How good is its note-taking function? Does it allow you to share marked-up documents? And will your mark-ups be saved even if the underlying document changes?

What are the extra features directors or company secretaries might require beyond storing and distributing the board packs?

Does it allow you to build meeting agendas and collate the minutes, all with the relevant documents attached?

Do you want features such as messaging between directors, or will they prove a distraction?

Will you need a portal that incorporates video meeting tools, such as Zoom or Microsoft Teams?

Company secretary view

Board portals are a huge time saver for company secretary John Wise.

As CFO and company secretary for ASX-listed property valuation company Acumentis Group, John Wise is responsible for assembling the board agenda and minutes — which he does using BoardPro. “Creating an agenda is very quick and straightforward,” says Wise. “You can create separate headings and within that create individual items. You can drag and drop attachments for the board papers and it produces it nicely formatted. Then it sends emails with links for board members so that they can log on and look at the agenda and papers.”

Wise also finds the board portal makes minute-taking easier. As the meeting progresses, he will use the “notes” function to store details of the discussion and the “decision” function to document a decision. There is also an “action” function that allows him to assign an action to somebody and put a due date on it.

“The decisions are all stored in the decision register,” says Wise. “So at any point in time, you can go back and say these are the decisions made and this is when they were made. If you want to, you can record the actual voting.”

He says the portal saves him half a day to a day in putting together the agenda and at least half a day in writing up the minutes. “By mid-afternoon, I would’ve sent out minutes of a meeting, which is a great benefit because the attendees will review it straight away while it’s fresh in their minds. Therefore, if they’ve got any suggestions, changes or comments, it’s done very quickly.”