Digital corporate governance is another development that has been speeded up by the worldwide impact of Covid-19. What may have been seen as an optional extra has become essential. Digital board meetings now play a vital part in ensuring that corporate governance continues to be effective.
Strong and stable boards are a necessity for enforcing and upholding corporate governance standards. As more companies digitize their governance procedures, businesses need to ensure that their boards can effectively provide oversight and carry out their responsibilities.
To do this, firms must first transform the in-person board meeting into a digital format. Success here means being able to carry out digital board meetings that not only allow for seamless collaboration and increased productivity, but also ensure compliance with regulations and data security laws.
Just as transitioning from traditional corporate governance processes to a digital one requires a broad rethinking, the same applies when moving toward a digital board meeting format. Similarly, however, the benefits of this shift can be significant.
A powerful boost to productivity
A key benefit is greater productivity that is a result of an improved flow of information. As long as the proper digital solutions are put in place, board members will have quicker access to the crucial information they need to make informed decisions. Whether it is past minutes, audit reports, or strategic plans, members can access the relevant information within seconds. This cuts down on wasted time and can have a powerful effect on the effectiveness of each meeting.
This increased productivity also extends beyond the actual meeting itself. In the preparation phase, time-consuming manual paper-based processes can be replaced by cloud-based digital formats. This enables easy adjustments and revisions up to and even during the meeting itself, creating savings in not just time but cost as well.
What happens after the meeting may be just as important as the meeting itself. Proper follow-up on the actions decided is critical. An ideal digital board meeting solution allows for a clear record of such steps to be kept, as well as enabling these steps to be tracked and assigned to the relevant people – even in real-time during the event.
Digital board meetings provide members with real-time access to the same set of documents, creating smoother collaboration while reducing the time (and costs) spent on low-value administrative tasks.
On top of this increased efficiency and productivity, digital board meetings also produce an additional layer of security that manual processes cannot replicate.
Robust security and compliance
Much of the conversation during board meetings concerns confidential business information, making security vital. A digital board meeting solution must apply the latest data encryption at all levels of the process.
Security also extends beyond confidentiality and into preservation. Storing documents on the cloud automatically protects it from physical risks such as those arising from fire or water damage. This is doubly important when considering the nature of board meeting documents.
Flexibility within a security setting is also critical. Varying organizational requirements means there is no “one size fits all” model for security access. Certain people might require access to certain documents but not others. Often, non-board members are brought in to brief the board. Access would need to be provided, but only to the relevant documents. A digital board meeting solution must be able to accommodate such security access.
The solution must be able to adapt to regulations surrounding data security, which are continually being updated and strengthened.
Embracing the digital future
The board meeting occupies an almost ‘sacred’ space within the corporate structure. So, it is not surprising that there has been some resistance against moving this tradition to the digital realm.
The benefits of doing so are clear. By improving board productivity, engagement, and effectiveness, a company’s corporate governance is strengthened. The Harvard Business Review reported a senior member of executive search firm Spencer Stuart saying that multiple CEOs and board chairs had told him that they would not be going back to the traditional board meeting format[1].
Even once the pandemic crisis has passed, digital board meetings are likely to stay. They may not be the only option available – there is undeniable value in face-to-face meetings – but their effectiveness means that they will persist as a mainstay option. We are moving into a new and better future, where digital corporate governance is the norm. It is time to embrace it, and digital board meetings are a vital part of that.
[1] https://hbr.org/2020/07/the-upside-of-virtual-board-meetings