Better Board Governance: The Value of the Board Portal The views and opinions expressed in this paper are those of the author and do not necessarily reflect the official policy or position of Thomson Reuters.
CONTENTS Better Board Governance: The Value of the Board Portal... 4 The increasing volume of board materials... 4 Elevating the role of boardroom technology... 4 The board portal checklist... 5 Security... 5 Customer support... 5 Usability Serving the needs of all your users... 6 Workflow tools... 6 Governance tools... 6 Permission and access rights... 6 Strategic intelligence... 7 Board portals and corporate governance.................................7 Better Board Governance with Accelus BoardLink... 7 2 Better Board Governance: The Value of the Board Portal March 2014
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Better Board Governance: The Value of the Board Portal The global nature of business continues to grow leaving board members with the responsibility of managing a wide range of issues at both a local and global level. Coupled with this, the board s role in corporate governance is at an all-time high, and the demands placed on boards for accountability and transparency are on the increase. Safeguarding business information and enabling fast strategic decision-making is directly linked to overall business success and a culture of compliance and good corporate governance must run through an organization, starting at the board level. The increasing volume of board materials Each year directors spend 71.3 hours reviewing reports and other materials and 81 hours attending Board and Committee meetings according to the 2013-2014 NACD Public Company Governance Survey. The results of the Thomson Reuters 2013 Board Governance Survey reported that organizations produce a staggering 16,010 pages of board materials on average per year with the average board book being 179 pages in length. That equates to board members spending just 16 seconds reviewing each page. The Thematic Review on Risk Governance published in February 2013 by the Financial Stability Board questioned the ability of boards to review this volume of information effectively, The information provided to the board was voluminous and not easily understood which hampered the ability of directors to fulfil their responsibilities. Furthermore, the 2013-2014 NACD Public Company Governance Survey states, Management needs to take the time to truncate the information delivered to the board. Thrown into the weeds and forced to prioritize materials, directors are more likely to become overwhelmed and miss critical risks. Organizations should consider if board members are even reading the information they really need to digest to make decisions. Information should be structured to help the reviewer easily identify the main points and be simple to search through and easily locate what they need. Elevating the role of boardroom technology Encouragingly, around half of organizations now use a board portal to manage their board communications. This is more than a 100% increase over the last 2 years according to the Thomson Reuters 2013 Board Governance Survey. Furthermore, 65% use a private computing device such as an ipad or laptop to store board communications compared to 44% in 2011. As board members continue to be globally dispersed and are increasingly more mobile this number is likely to rise even further. The advent of board portals has enabled board members to communicate across time zones and share documents securely at anytime and from any location. The efficiency gains of moving from paper-based documents to an electronic format are clearly substantial. While organizations look to save on printing and distribution costs, the real benefit lies in the improved security a portal offers to a manual process. There are also time savings to be realized through faster distribution of board 4 Better Board Governance: The Value of the Board Portal March 2014
books and ease of which last minute additions and amendments can be incorporated. Furthermore, web-based solutions accessible via mobile technology provide the flexibility board members need to be able to work on board matters in line with their own schedules and make informed decisions fast. The board portal checklist Board portals offer a variety of features that make board book compilation and distribution easier. They should be intuitive and simple to use with minimal training required. There are several key areas that organizations need to look closely at when choosing or reviewing a board portal: Security Customer support Usability Workflow tools Governance tools Permission and access rights Strategic intelligence Security Protecting a company s most confidential strategic data is clearly the most important role of a board portal. Organizations need to check they have the most secure parameters in place to protect against internal, external and even physical risks. Document management solutions or solutions developed in-house are vetted and supported by internal IT departments. A board portal should be available as a SaaS (Software as a Service) solution with encrypted data hosted in the cloud to ensure that board level conversations remain entirely confidential. A board portal should undergo a Type 2 SOC1 (in accordance with SSAE 16 and ISEA 3402) and SOC 2 audit. In addition, a portal with a SysTrust certification meeting the Confidentiality and Security principle provides the assurance that the SaaS solution meets an organization s highest compliance standards while maintaining the utmost security and confidentiality of their data. Another consideration is where all the data contained within the portal is hosted. Does your board portal provider own its own data centers? Furthermore, is the solution developed, maintained and supported by the provider or are aspects such as support outsourced to a third party? Security needs to be watertight at every point. A board portal should have authentication protocols in place to ensure that only authorized people have access, reducing the risk of board materials being lost or stolen. All information should be encrypted at all times to reduce the threat of a data breach or loss. Customer support With limited time available, organizations should assist board members in being able to dedicate their full attention to board matters. It is therefore important for organizations to ensure that the support offered is world-class. If a director is traveling and forgets their password at 3am they need and expect immediate assistance. Dedicated professional support should be available 24/7 from experts that truly understand your business. 5 Better Board Governance: The Value of the Board Portal March 2014
Usability Serving the needs of all your users A board portal needs to support the requirements of all its users. A corporate secretary is typically office based, creating board books from a PC or laptop. A web-based interface should provide the flexibility and support they need to make the board book compilation process straight forward and efficient. In contrast, board members need to be able to access information securely wherever they are and do not have time for recurrent training. With a well designed ipad app, board members can access all the board materials they need to at their convenience. If they sit on multiple boards they should also be able to access each company s board materials completely securely and in isolation from each other, through a single sign-on and all from the same ipad. Most organizations have many board members serving on multiple boards across the world. Consequently they need to be able to review board materials when they are traveling. A board portal needs to be accessible in both an online and offline mode allowing board members to simply login to receive updates when and where they can. Workflow tools A board portal needs to align with how your board members will review board materials. While reading they need to be able to bookmark items and add their own notes to materials. During a board or committee meeting, these annotations should be easily accessible as cues for discussion. Governance tools A board portal should provide organizations with the tools they need to complete the mandatory tasks to meet corporate governance requirements. A voting feature offers significant efficiency savings as well as providing an electronic audit trial. As an alternative to physical ad-hoc meetings, board members can simply be invited to approve board resolutions, draft documents and other board decisions with the confidence approvals are evidenced appropriately. Organizations are required to survey board members periodically to meet corporate governance requirements. A survey function offered within a board portal provides an audit trail and can keep a record of previous answers for board members to refer to. In addition to annual surveys organizations can utilize this feature to solicit more regular feedback from board members and obtain immediate responses to pertinent governance issues. Permission and access rights Corporate secretaries need to ensure specific content can be restricted from view and folders or pages can be displayed with no content based on individual access rights, ensuring users only see the information to which they should have access. The ability to restrict access to documents and specific content by individual user supports good governance and provides significant time savings by removing the need for multiple versions of documents to be created. 6 Better Board Governance: The Value of the Board Portal March 2014
Strategic intelligence It is important to ensure board members are fully informed and prepared for each meeting. In addition to traditional board materials the board often requests information on a variety of topics. Organizations should look at offering relevant information to board members through a board portal such as industry news and financial information tailored to the business. Board portals and corporate governance The benefits and reduced risks of employing a board portal for board communications are extensive. Companies that truly focus their attention on good corporate governance elevate the role of the board portal to a corporate governance solution. Voting and survey features along with login activity reports all provide an evidence trail for audit purposes and demonstrable corporate governance. With the continued focus on global corporate governance it is likely that we will see this trend grow. Better Board Governance with Accelus BoardLink Board members and Executive teams need a highly secure environment to communicate and access the information they need to make informed decisions fast. BoardLink helps organizations across the world every day to: Compile and distribute board books electronically and incorporate last minute changes easily Improve efficiency by fast tracking the approvals and voting process Demonstrate good governance Protect board communications and confidential documents Empower boardroom decision-making with customized financial and business news and analyst reports Access Accelus BoardLink via an ipad app or web portal with dedicated multi-lingual support available 24/7. Trust in Thomson Reuters, the world s leading source of intelligent information for businesses and professionals. 7 Better Board Governance: The Value of the Board Portal March 2014
THOMSON REUTERS ACCELUS The Thomson Reuters Governance, Risk & Compliance (GRC) business delivers a comprehensive set of solutions designed to empower audit, risk and compliance professionals, business leaders, and the Boards they serve to reliably achieve business objectives, address uncertainty, and act with integrity. Thomson Reuters Accelus connects business transactions, strategy and operations to the everchanging regulatory environment, enabling firms to manage business risk. A comprehensive platform supported by a range of applications and trusted regulatory and risk intelligence data, Accelus brings together market-leading solutions for governance, risk and compliance management, global regulatory intelligence, financial crime, anti-bribery and corruption, enhanced due diligence, training and e-learning, and board of director and disclosure services. Thomson Reuters has been named as a category leader in the Chartis RiskTech Quadrant For Operational Risk Management Systems, category leader in the Chartis RiskTech Quadrant for Enterprise Governance, Risk and Compliance Systems and has been positioned by Gartner, Inc. in its Leaders Quadrant of the Enterprise Governance, Risk and Compliance Platforms Magic Quadrant. Thomson Reuters was also named as Operational Risk Software Provider of the Year Award in the Operational Risk and Regulation Awards 2013. For more information, visit accelus.thomsonreuters.com 2014 Thomson Reuters GRC00921/3-14