Remember when board governance required blind faith?
Twenty years ago, many directors trusted that they were seeing all critical documents and being consulted on key decisions based on a handshake with the chair and CEO.
Mostly it worked ok, until there were issues. Facing a product flop, customer drop or compliance failure, the CEO or chair might have started selectively sharing concerns with agreeable directors. One, then two or three board meetings turned into rushed updates about glossed over truths. And then those habits got hard to break.
It’s almost cliché to say we are living in an age of transparency, but it’s worth repeating because so many businesses are still catching up with modern governance expectations.
Why has the board become a clear glass fishbowl? It’s spill over from what Harvard Business Review describes as a critical business shift in transparent business leadership. External voices and views, including your directors, now hold businesses to higher account and bring their own independent perspective more than ever before.
That’s the why. But how can your board can achieve transparency and do it economically?
If your organization isn’t yet using technology to provide open access to information for your board, or if you are re-assessing the tool that you use, the step up might be a lot easier and more affordable than you think. Plenty of easy-to-use board portal tools now exist to deliver basic transparency to all directors:
1. Centralized, one stop access to board documents. Younger directors (which you need to recruit) and future-oriented older directors (who are highly valuable to your business) will insist on access anytime, from any device, anywhere in the world.
2. Automatic archive and audit trail – No hiding secrets in a closet. Even new recruits should be aware of wins / losses of the past. Own your good news and lessons learned with same volume of voice.
3. Same time access to updates and alerts. Every director, regardless of whether they are a naysayer, or where they are in the world, needs to receive electronic notice of meeting timing, key votes and issue progress at exactly the same time. Favoritism, nepotism? No way. Eliminate any risk of bias in communication.
Beyond the basics though, you might be wise to take advantage of a few more capabilities that have become available in board portals:
4. Valid online voting – Corporate boards often need to take critical votes when directors’ schedules conflict. Board portal voting can be a viable option.
5. Surveys to measure director and board performance – Transparency needs to work both ways. Use at least annual surveys to assess directors’ contribution and awareness of your strategic issues. Benchmark annual total board performance and hold your chair accountable to progress.
6. Data security that ensures anywhere, emergency access – Regardless of where your headquarters is located, in times of natural disaster or corporate crisis your directors must have immediate, remote access to make decisions. Look for a board portal that locates your data optimally for risk and governance.
Lastly, be skeptical about premium pricing. As Gartner reported in their Market Guide for Board Portals, “The majority of boards have very similar processes, and board portals have very similar feature sets.” With most board portal software performing similar functions, it’s very important to evaluate service, pricing and track record with organizations similar to yours.
If transparency and affordability are critical to your board, get to know Aprio.