The complete guide to board digitalisation and board portals
Why is the digitalisation of the board of directors essential in the modern world? What is a board portal and what are its benefits? Find out in this complete guide.
Today’s boards of directors are spending more time on their mandates and overseeing a wider range of issues than ever before. In a world of constant disruption and innovation, the expectations placed on board members continue to grow. Modern boards must play an active role in overseeing corporate strategy and risk management, while simultaneously taking into account technological change, potential business conflicts, regulatory pressures, and other emerging trends such as sustainability, climate change, and the shifting geopolitical environment.
With boards now facing increased workloads, it is vital that they become more efficient. The digitalisation of board governance and meeting management processes has become essential. The next major step is to digitise boards effectively through a dedicated board portal. In this sense, a meeting management solution offers multiple opportunities for boards of directors and executive managers at all levels.
This guide explains:
- What challenges boards of directors face today
- Why digitalisation can no longer be avoided
- Why board digitalisation is the next crucial step in governance
- What a board portal is and the benefits it brings
- What the specific benefits of using a board portal are for individual board members
The importance of digitalising the board of directors
The VUCA world continues to challenge organisations
In today’s world of constant disruption and innovation, an organisation’s board of directors is under continuous pressure to improve its efficiency.
Boards of directors, just like the organisations they manage, face multiple challenges. These include:
- The changing geopolitical environment
- Increased attention to environmental, social, and governance (ESG) issues
- Digitalisation and new technological trends
- Cyber security
- New governance rules and corporate mandates.2
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These challenges have been heightened by the COVID-19 pandemic, the current geopolitical crises, and ongoing economic and social upheaval. To return companies to a path of growth, the contribution of the board of directors is central to companies’ success.
Although the most adaptive board members report focusing more on areas that promote the future resilience of their organisation, it is clear that all of these topics are vital to the success of any business. It is, therefore, in every board’s interest that they are addressed effectively.
As businesses and economies continue to recover from the COVID-19 crisis, it is time for boards to engage deeply with these issues, support their management teams, and ensure their organisations remain resilient and competitive.
To achieve this, it’s essential to put robust and effective governance processes in place – ones that are not only paperless, but also digital. These will help organisations cope with the new hybrid working norms and make board members more efficient and flexible. They will also simultaneously guarantee information security and process compliance. In this sense, a solution that guarantees effective collaboration between board members and seamless management of board meetings is necessary.
Dematerialisation can no longer be avoided
While many companies have embraced digitalisation over the last decade to make business operations more flexible and competitive, these initiatives have, unfortunately, rarely started with the board. The formality associated with the board’s activities and its close links with legal departments has led to a more traditional approach.
Recently, external events such as the pandemic have radically changed the way boards work and interact, leading to a rapid – though not meticulously planned – dematerialisation of the board. If we look specifically at COVID-19, a time when rapid and informed decision-making was essential, managers were forced to adopt digital alternatives to familiar processes. Board meetings have become virtual and more frequent to meet increasing demands.
Dematerialising the board is an encouraging first step towards the future. However, being dematerialised does not mean being digitalised and can actually pose problems.
Dematerialisation does not mean digitalisation
Due to the mass move to remote working during the pandemic, the vast majority of companies today have had to dematerialise their board of directors. We all learned a lot from this challenging time. Most board meetings can now either be held remotely or in a hybrid fashion. Board documents can be digitised in PDF format and sent by email instead of using paper, which is more efficient and sustainable, and collaboration between board members can now take place online using collaborative tools. Companies and their governance are using a variety of tools to comply with the working world’s new normal.
Dematerialising the board is an encouraging first step towards the future. However, dematerialisation is not the same as digitisation and does actually pose some problems. They are:
- Using multiple tools leads to working in silos and information loss. Preparing and annotating PDF documents before a board meeting requires a lot of work from the corporate secretary and board members.
For the corporate secretary, collecting up-to-date information and distributing it in time to all board members can become a real headache if they do not have a centralised tool to complete the task.
For the chairperson and other board members, the same applies to the preparation of the agenda and the collection/validation of topics. Often, last-minute changes and multiple updates lead to a lack of clarity and hinder preparation, which can affect the quality of the meeting and decision-making. Communication between managers is not centralised and is split between email, instant messaging, and telephone, resulting in a potential loss of information.
Only a centralised solution allows for effective collaboration in an asynchronous manner — in a way that will not result in information loss and will help members effectively prepare for board meetings. Having everything easily accessible within the same solution during the board meeting also facilitates the decision-making process.
It exposes boards and their companies to security breaches: every week brings news of yet another cyber-attack on a company. Typically, the result is a data leak that has a snowball effect: share prices fall, brand reputation is damaged, the board and management’s competence is put into question, and potential lawsuits are filed, which can result in hefty fines and compensation.
Looking at the largest companies hit in recent years, such as Target (2013), Sony (2014), Yahoo (2016), Equifax (2017), Maersk (2017), Marriott (2018), and Capital One (2019), these attacks cost somewhere between 200 and 400 million dollars each, and in the majority of cases, members of management were dismissed.3 For SMEs, this can even lead to bankruptcy.
Therefore, regardless of a company’s size or industry, its long-term survival depends on strong, proactive cyber risk management. As the board of directors handles the most sensitive issues within an organisation, they need to consider this issue very seriously and meticulously select the technological solutions they use to collaborate. It is likely that everyone will agree that cloud-based solutions, like emails, phone calls, letters and chats, are clearly not the most reliable solutions in this regard.
Only a secure, centralised solution is capable of dealing with the growing threat posed by cyber-attacks.
Given the crucial importance of the topics discussed in today’s boardrooms, true digitalisation of the board is the only sustainable solution that can handle modern threats safely and enable teams to work efficiently.
Using a board portal is vital for sustaining governance in the future.
Digitalising the board of directors is a key step towards effective and sustainable governance
The volatile, uncertain, complex, and ambiguous (VUCA) world never ceases to surprise us, as evidenced by the current global geopolitical situation. Continuing to dematerialise the board of directors through digitisation is therefore a must.
Board members face challenges, answer critical questions, and adapt to the new normal of hybrid working. To deal with these responsibilities, the only sustainable solution is digital, centralised and covers all the board’s needs, namely:
- Organising, preparing, and executing board meetings
- Effective asynchronous collaboration between board members
- Decision-making and follow-up of tasks and actions
- A flexible, secure, and compliant working environment
- Efficient document management (agendas, minutes, annotations on reference documents, etc.)
A board portal is a true necessity for any company that needs to secure the future of its governance. A dedicated board meeting management solution like Sherpany meets all these requirements. Our meeting management solution is designed specifically for the board of directors and executives, taking into account their specific constraints and providing a complete methodology with a secure, centralised, and compliant solution.
In the following section, we discuss the details of a board portal and how it can fully support the digitisation of your board of directors.
What is a board portal?
In the 1990s, when internet access started becoming widespread, forward-thinking managers began to think about how to optimise their board processes, even if technology at the time was limited. It was not until the turn of the millennium that the first board portal was officially introduced to the market. And there is no manager, corporate secretary, or chairperson who is unaware of this tool today, given the amount of board dematerialisation that has occurred in recent decades. However, many people think they can make do with other digital solutions such as scanned documents, collaborative tools, online meeting tools, and email.
However, as we have seen, using a myriad of digital solutions is hardly a sufficient way to fully digitalise the board of directors and make it truly effective and capable of handling the demands of the modern day. This is where the board portal comes in.
A board portal is a digital tool that facilitates board member collaboration efficiently and securely while complying with regulatory standards. A board portal can also be called a board portal or a paperless board solution.
A board portal optimises every board meeting by providing dedicated technical support for all board meeting processes – before, after and during the meeting. This increases the overall performance of board meetings and improves decision-making and follow-up, consequently making governance and business more efficient.
A board portal is a vital, comprehensive tool which strengthens the board by digitalising it. It enables all board processes to be centralised in one single, complaint and secure tool:
- Digital and secure document management
- Flexible and transparent asynchronous collaboration between board members
- Online voting (digital circular resolutions)
- Preparation of meeting agendas and taking of meeting minutes in accordance with the necessary standards
- Organisation of meetings (preparation, conduct of the meeting and follow-up)
- Better decision-making and follow-up of tasks and actions over time
A board portal saves board members’ time, whether they’re directors, chairs, or corporate secretaries. By managing all board processes in a transparent, centralised, and flexible way, they can focus on what matters most: working together to make decisions that are crucial to the organisation’s future.
For any company, having the right board portal facilitates communication, improves board members' decision-making and governance, and provides a competitive advantage. As we have seen, digitalising your board through a board portal has become a necessity in the modern world.
In the following section, you can download a guide that explains the benefits of a board portal in depth. We also highlight the benefits according to different roles within the board (chairperson, secretary general, director) so that you can better understand how it will make your daily board activities more efficient.
The advantages of a board portal
In the guide below, you will learn how a board portal can make your governance more successful, both now and in the future, by affording it greater flexibility and efficiency. We will answer the following questions:
- What are the benefits of using a board portal?
- What are the specific benefits of using a board portal for individual board members?
1 “The postpandemic board agenda: Redefining corporate resilience”, McKinsey & Company, 2021.
2 “Five Challenges Facing Today’s Board Chair: Insights from FTSE Chairs”, Alice Breeden & Will Moynahan, Heidrick & Struggles.