Just as increasingly popular cloud services move much of our document storage into the digital realm, companies are also shifting their board materials and communications online, finds a new study conducted jointly by KPMG’s Audit Committee Institute and Corporate Secretary.
Photo by Matt Buchanan
The number of companies utilizing board portals (online resources hosting board materials and other company information) has been growing substantially, with half of the 358 general counsels, corporate secretaries, senior managers and directors surveyed saying their companies used them. Within the next six to 12 months, an additional 20 percent plan to make the move to board portals. This is in stark contrast to the nine percent of companies who used online portals when the survey was conducted in 2009.
What’s also changing is the way in which directors access this information. Eighteen percent of companies reported supplying their directors with tablet computers to access the portal, with another 20 percent planning on doing so in the upcoming year.
Companies may be more likely to provide tablets to board members for board portal access because of IT security concerns – 75 percent reported some degree of concern over portal security – and dedicated tablets provide a way to mitigate these concerns. Some companies also restrict the content posted to the portals, with 32 percent of respondents reporting that “sensitive” information is not posted to the portal. All information pertinent to board members is posted online at 68 percent of companies.
Board portals are also taking communications between board members out of the regularly scheduled meetings and into directors’ everyday lives, with 17 percent of companies using the portals for real-time communications and collaboration between board members. The most common usage of the portals, however, are posting pre-meeting board materials and updating the board on important company developments. Seventy percent of boards update the portals whenever new, pertinent information is available, while the remaining 30 percent update on a scheduled basis, quarterly, monthly or weekly.
At 64 percent of companies, some or most members of the respondents’ boards had difficulty adapting to the new technology. Despite this learning curve, 55 percent believed that the portals made their boards more efficient.
The security concerns are a huge issue and deserves to be reiterated. Without online banking level encryption, robust changelogs, audit tools, and other security measures, the value for a board portal drops significantly. If a board portal provider has no more security than that of Dropbox, you are opening yourself to more problems than a Board Portal solves. In short, security is one of the most important and necessary features for a Board Portal.