How Smaller Boards Benefit From Board Portals

How Smaller Boards Benefit From Board Portals

Board management software, or a board portal, is often perceived to be a solution that’s designed for larger boards belonging to Fortune 100 companies. This makes it seem that the technology is unattainable for smaller and mid-sized enterprises (SMEs) due to high cost considerations.

But the reality is that board portals are essential for the boards of these businesses as well, and there are players in the market, such as Boardlogic, who understand the need to serve this market with the same levels of security, quality, and practical functionalities  — minus distracting features and the hefty price tag. 

RESISTANCE TO CHANGE

There can be some resistance to change. Smaller boards might ask why they need a board portal solution when their board structure is simple, meeting workflows are straightforward, and email channels and team collaboration software “do the job.” 

The answer? Blind spots. 

Boards who go with the above reasoning can overlook issues that they didn’t know were critical concerns in the first place — and they impact boards of all sizes.

In this post, we highlight some of the advantages to using board portals for small to mid-sized boards and expose the blindspots that are important to the board’s overall effectiveness.

LARGE-SCALE BENEFITS FOR SMALLER BOARDS

1. SECURITY

Cybersecurity should be a primary and ongoing concern for all boards — regardless of size. 

The board of directors and officers of the company have a fiduciary duty to oversee the management of cybersecurity risks as it relates to the resiliency of the organisation. Failure to do so exposes not only the company to regulatory risks and fines, but also brings forth issues around the personal liability of directors

Most boards still resort to the use of unsecure channels such as email to deliver board papers or board packs and communicate with each other, but this presents significant risks. From sending board-level information to incorrect recipients to phishing scams, email use is riddled with cybersecurity-related threats.

Board portals mitigate security risks.

When dealing with board-level information — which might hold critical data on strategy, financial records, intellectual property, etc. — data security should be factored into the conversation. 

Board portals help mitigate security risk in a number of ways.

As a centralised hub and repository for board information, board portals eliminate the need for email as a tool for communications. Boardlogic, for instance, has its own messaging solution within the platform as well as collaboration tools such as Shared Notes, which enable board members to stay connected in a highly-secure manner.  

The most secure board portals also adopt a multi-level encryption framework. This essentially means that data is scrambled into another form, or code, so that only individuals with the right “decryption key” or password can decipher it. This significantly prevents data theft. 

In addition, unlike misplaced or stolen printed board packs, if a device with access to the board portal is lost, access can be instantly disabled and remotely revoked or removed.

In today’s cybersecurity environment, it is important to emphasise a “security-first” culture. And that begins at the top of the top. The adoption of board portal solutions signals to the rest of the organisation that the board places serious weight on the cyberrisks that present-day businesses face. The board covers its bases, acknowledging that security is a baseline requirement with far-reaching implications — regardless of the number of individuals that sit on the board.

2.  EFFICIENCY

Apart from security considerations, sending board documents via email (or post) can simply be inefficient. It happens often enough: directors have to contend with the same files being sent multiple times to their inbox due to updates or corrections. 

As a result, board members and officers have to manage version control on their own. It’s a tedious and time-consuming process which can lead to incorrect or outdated data being reviewed. This ultimately impacts the quality of input and engagement from the board. Often overlooked, efficiency is critical to overall board performance.

Board portals serve as the central hub for board information.

Board portals are designed to be a central repository to store and manage board-related information. It becomes the single-source of truth for the board.

Board packs are easily uploaded to the platform for board members to access. Any changes to the board papers are reflected in real time and the board is appropriately notified. With board management software, board members don’t need to organise, sort, and track confusing file versions which slow down their review. They simply need to revert to what’s on the platform. 

Boards also, regardless of size, are subject to a system of checks and balances. This is where complex audits, compliance, or corporate governance requirements might come in. By using board portal technology, smaller and mid-sized boards adopt a meeting and process workflow that not only allows them to organise or archive board files, but also inherently adopt good corporate governance principles — from transparency to accountability.

3. HIGHER LEVELS OF BOARD ENGAGEMENT

Manually managed meeting processes have their significant share of administrative choke points. Board members lose time waiting on files or papers to reach them. Add to that the time spent waiting on approval or signature requests, and the delay in getting those back to the board administrator. All of these can take their toll on the engagement levels of the board. 

Board portals carve out more time for strategic deliberation.

With board portals, boards are able to hone in on reviewing board papers in a process that’s virtually frictionless. Directors and officers can spend their time more effectively, as opposed to being burdened with administrative concerns. Board portals provide the board with instant access to functionalities —such as Voting and Approvals, or e-Signatures — that drive agile decision making. 

Attention is shifted to holding better conversations or engaging in strategic deliberation, all of which encourage active board engagement.

4. BUSINESS CONTINUITY IN TIMES OF CRISES

No other event in recent times was (and perhaps still is) as disruptive as the global pandemic. As highlighted in a previous blog post, an article by KPMG sheds light on two technology issues that organisations had to confront as employees worked from remotely:

  • the lack of remote access technology
  • the lack of digitised business processes

Smaller and mid-sized boards were not spared from these challenges. A lack of digitised business processes amongst board members often meant that information had to be distributed via email or shared through accessible directory file folders which, as we previously noted, have security repercussions. 

Board portals help boards act swiftly in times of crisis.

The use of a board portal addresses the two problems identified above. By digitising board meeting workflows from end-to-end, boards are able to communicate and collaborate remotely in a highly-secure environment no matter the scale of the crisis. The board remains online and connected at all times.

This is true, too, in the event that the organisation becomes the target of a cybersecurity attack – such as a data breach. Because board management software operates on a technology platform that’s separate and independent from that of the organisation, the board can continue to meet, engage, collaborate and exchange information to support strategic decision-making when it’s needed most.

CONCLUSION

“Why fix something if it’s not broken?”

For smaller boards, this might seem like a valid argument when it comes to the decision to adopt board management software. 

But it crumbles in the face of the significant risks boards inherently assume when they decide to do away with such a solution — such as cybersecurity attacks or breaches, inefficiency, lack of board engagement, and the inability to operate in times of crises. 

Is your board ready to assume the risks and live with these threats?

In this context, the use of board portal software becomes a topic worthy of exploration and consideration.