Board Meetings in Pajamas

Get ready to start attending board meetings in pajamas. Using what have been dubbed “board portals,” either created in-house or by outside providers, some directors are virtually moving the board process online.

With all of the necessary information in one central location, portals can cut down on travel, eliminate mailing and delivery hassles, increase communication among members, and make board materials easier to read. But like many technologies, the “always-on” aspect of electronic tools also makes it harder for directors to separate their board lives from their other jobs or “retirements.” And the need to remember passwords and navigate complex security measures can add frustration to the process.

For corporate secretaries and general counsels who traditionally compile board books and other materials, portals make life a little easier. They not only reduce the time it takes to organize materials, they allow content to be uploaded and edited in a fraction of the time it would take to sort, staple, and mail. (Portals can reduce the cost of office supplies, too.)

A cottage industry of portal providers has cropped up in recent years to fill the need for virtual boardrooms. These providers not only supply software and/or websites for companies to move board meetings online, they also offer training to help directors adapt to the service. Most have staff on call around the clock, providing help for those directors who aren’t as computer-savvy as they would like to be.

After a slow pace of implementation when portals first began to hit the market a few years ago, the rate of adoption for board technology is now growing steadily. A survey conducted last year found the percentage of companies using portals or websites for communications grew to 26 percent, from 12 percent in 2005, according to the Society of Corporate Secretaries and Governance Professionals.

James Long, vice chairman of Wackenhut Services, says board portals are a great way to avoid the abundance of paper materials that can weigh down directors at board meetings. “Directors like the idea that they don’t have to lug hard copies to a meeting. Previously, they would have a laptop and six pounds of paper.”

The rate of adoption for board technology is now growing rapidly. A survey conducted last year found that the percentage of companies using portals grew to 26 percent. 

Not all board members are ready for the change. “I have been pushing for the conversion to electronic delivery,” says James Pitts, who sits on the board of Wainwright Bank and is a member of the New England chapter of the National Association of Corporate Directors, which has been using Thomson BoardLink’s portal for more than two years. “But I have witnessed situations where an occasional board member is not yet electronic-communications literate and resists.” In those few instances, Pitts says, directors were able to get up to speed in very little time with the help of IT support and the director’s administrative assistant.

Portal packages, which range in price from an average of $25,000 to $40,000, include on-site training, 24/7 support, and a bevy of security features.

Directors Desk by Nasdaq

Directors Desk, a portal company based in Spokane, Wash., launched its first version in 2004 and last summer was acquired by Nasdaq. It currently has some 75 clients; Nasdaq’s own board went live with the portal in September. When choosing the layout for the portal, Adam Ross, Directors Desk associate vice president, says the company opted for a standard look, similar to that of other portals, that would be easy for any director to use.

A discussion thread is one feature offered by Directors Desk that other portals don’t have, according to Ross, who says this feature has been popular among directors, as it allows customized groups to debate and discuss any number of topics inside the portal. What’s more, Directors Desk employs a unique security feature. Aside from logging on with a username and password, directors must enter a personal-identification number (PIN) onto what looks like a telephone-dial pad. The numbers on the pad change position each time the user logs on, to prevent hackers using spyware from detecting the login pattern.

Other features offered by Directors Desk include profiles of directors and users that feature photos, affiliations, and other contact information. A calendar function allows directors to look at scheduled meetings for all committees, or just the ones they sit on. A hottopics feature displays daily news and gives directors a link to the full story. The portal also offers low-tech options for delivery of board materials, which makes it compatible with multiple technologies, such as faxing and email. This feature is especially useful for board members who aren’t as comfortable with online options. “I can’t tell you how many times I have heard how useful our fax notifications features are for directors,” says Ross. “Boards do not necessarily need to go to an ‘all-or-nothing’ solution when deciding on a portal.”