Board Portal Essentials for Community Banking

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1 BoardPad Thought Leadership Series Board Portal Essentials for Community Banking Top 5 Things a Community Bank Board Needs to Know What you will learn: What is a board portal What is progressive governance How to ensure high user adoption

2 Executive Summary Today s regulatory environment continues to be the most pressing issue for community bankers and equipping your directors with a confidential and secure way to communicate and share information is essential. To remain competitive in this environment of ever-growing regulation, banking executives should embrace the explosion of mobile technology devices to be more effective and productive. Often though, the introduction of these devices can lead to executives and employees inadvertently circumventing established systems. If not managed appropriately, this exposure can increase risk by allowing sensitive data to be stored and shared on uncontrolled devices. From board meeting Customers count on your bank to keep their investments secure and you need to secure your sensitive documents in a board portal designed with the best practices and regulatory environment of community banks in mind. Mike Evans, CEO ICSA Boardroom Apps, Sept 2014 documents to a branch s loan committee papers, it is essential to protect information and provide people with the tools they need to do their job more efficiently and more securely. This paper will explore the top 5 things a community bank board needs to know and ways to streamline the full range of communications satisfying the board s need for timely, accurate and in-depth information while managing information security risk. Introduction The use of technology in the banker s boardroom is not a new concept. Following the introduction of the ipad to the boardroom in 2010, it was evident that the potential for a digital distribution of board papers had arrived. The ability to review a high volume of sensitive information, delivered through user-friendly and intuitive Apple or Windows tablet devices means that more and more directors are happy to consider a portable tablet solution as a viable alternative to paper board materials. In 2014 a board portal is now a necessity and to deploy this you need advanced security and tools that are specifically created for financial institutions. Greater Governance & Regulation The principles of the Sarbanes-Oxley Act set new fiduciary standards that quickly became industry best practice. Although its rules were not mandatory for small banks, the FDIC advised that every depository institution regardless of size should establish an independent audit committee, develop an internal controls report, and have an annual audit of its financial statements by an independent public accountant. This has driven many banks to increase the number of outside, independent directors on their board and led to more frequent and structured board meetings, increased information review, and increased communications between meetings. So what exactly is a board portal? A board portal allows for the secure electronic exchange of information between board members and the bank s management. The need has evolved as external board members are not typically part of a bank s internal computer network and so an independent solution is required.

3 The board portal should be a secure workspace devoted exclusively to the board and managed by those staff assigned to serve as the interface between the board and the bank. It should offer the instant distribution of board and committee meeting documents to directors, which they can securely download for offline reading. A self-service reference library can provide directors with 24/7 access to past meeting documents and minutes, charters, bank policies, investment portfolios, press coverage, regulatory and legislative updates, and reports such as branch performance, collateral stratification, and the Watch List. Typically, the portal includes encryption to protect the bank s data against unauthorized access especially on mobile devices and security controls that keep members communications with each other private. They should enforce the bank s document retention policies, not record directors activities and allow for the bank to remotely wipe any directors annotations once the meeting has been held. The portal also includes tools that greatly reduce the time and cost of producing and managing board materials and scheduling board work. Interestingly, it has become common practice for management teams to use their own version of a board portal as they seek to add greater governance to their meetings and increased security for sharing and collaboration on documents, especially on mobile devices. Top 5 Things a Community Bank Board Needs to Know about Board Portal Software Successful implementation of a board portal starts by involving the right people in the selection process and asking vendors to explain how their solution addresses your board s working practices and the bank s IT environment. This should include information security policies and regulatory requirements. Successful implementation requires a gradual transition from paper or existing electronic tools to the board portal, with sufficient support and training for every board member for the highest user adoption. This could include a trial with a committee; perhaps one with the most paperwork so members will see the immediate benefit. Here are 5 things you should know: 1. Progressive Governance and an easy to use Directors Dashboard ensures the highest user adoption with the lowest risks Board portals should enhance governance, ease the implementation of best practices, and ensure compliance with corporate policies and industry regulations. This can be achieved by providing tools to: Standardize the structure for all board and committee meetings, along with the schedules and methods used to agree on the agenda and delivery of documents Create dedicated areas for specific subject matters to keep directors informed, such as for the audit and loan committees Provide more timely access to accurate information Enforce the bank s requirements in day-to-day workflow, such as information security policies that control how information can be shared, protecting the bank s data Report on meeting attendance

4 removed by the administrator. This should include last minute updates to documents and changes to the agenda. Everything should be available offline so directors can prepare for meetings even when there is no internet connection. Any changes should be automatically synchronized with the server next time online. 5. You need centralized control of content to reduce liability 2. Ensure mobility meeting management and usage on any device Access from tablet devices, such as ipad and Windows tablets, provides directors with the greatest flexibility and are the most popular today. These devices are designed to always be on always connected and are far more convenient for reading board materials than a laptop. However, be prepared for some directors to prefer laptops. A board portal should support the main technologies in use today to ensure buy-in from the whole board; an app on a tablet device and a web portal for access from a PC or Mac computer. 3. Provide real-time collaboration and bi-directional communication Users can comment on documents and share those comments with others. This can be between a director and the rest of the board, or between a director and their executive assistant or their support team. Shifting to bi-directional communications allows for interactive capabilities that can improve decision-making by providing greater efficiency and allowing directors to focus on the substantive issues rather than minutiae. 4. Real-time syncing secure content online and offline is critical So directors do not have to manage files themselves, the app should sync whenever online, downloading anything thats new and deleting anything that is Protecting the bank s data is paramount and you need to control what devices directors can use, what information can be accessed and for how long, and what can be done with it. A board portal should provide a variety of functions to segregate information so it is only visible to members of that board or committee. From time-to-time, a conflict of interest may arise and the portal should allow you to deny a specific director access to specific information if necessary. Mobile devices such as ipads and Windows tablets are by far the most popular tools for reviewing board materials; however, they are also easier to misplace than laptops and are more prone to theft. Directors may also bring their own device and the bank may have less control over the device s security. So, a bank should consider a board portal that provides an app with a secure container on the device over which the bank has complete control. This should include the app deploying its own encryption to protect all data stored within it, in additional to the device s standard encryption. There should be an access password that would be in addition to the device PIN or passcode and a function for the board portal to control the app s screen saver lock time and restrict ing, printing and exporting of documents. Consider a board portal that allows IT staff to perform system management functions, such as creating users and resetting passwords, but that does not permit them access to meetings or documents. All activities by non-board members should be audited, specifically functions relating to user management and password resets to help identify any attempt to hijack a director s user account.

5 Conclusion So, if your board is still using bulky paper-board books, unsecure file shares, or first generation board portal software, you need to explore the next generation of board portal. This includes a community bank specific board portal with built-in security that is easy to use and has advanced document and meeting lifecycle management. It also needs to have real-time collaboration, progressive governance, mobile application management, and a director s dashboard. You will realize immense business benefits including efficiencies in meetings, increased productivity, ability to make more informed decisions, streamlined communications and most importantly for the community bank, reduced liability. About the Author Martyn Chapman Executive Committee at ICSA Boardroom Apps About BoardPad for Community Banks BoardPad is transforming board collaboration for community banks turning executives devices into director dashboards for more effective meetings. BoardPad s easy to use advanced board portal platform drives meeting lifecycle management, real-time collaboration, progressive governance, and mobility meeting management throughout a financial institution. With over two decades providing governance solutions to the Fortune 500, BoardPad is trusted by over 20,000 users in 140 countries for more meeting intelligence to create, distribute and efficiently act on meeting materials. Martyn Chapman has worked with boards, committees and legal teams across the financial services industry, government and multi-national corporations before joining ICSA Boardroom Apps and its sister company ICSA Software International to work on their e-governance and compliance software products, BoardPad and Blueprint OneWorld. For more information on BoardPad, please contact us: ICSA Boardroom Apps, 200 Park Avenue, 17th floor, New York, NY info@boardpad.com boardpad.com/community-banking 2014 ICSA Boardroom Apps. BoardPad is a registered trademark of ICSA Boardroom Apps.