Traditionally, preparation for board meetings has involved an enormous amount of time, expense, and stress. There are always last-minute items that have to be incorporated into the board book — that heavy package that goes to board members and their support staff before a meeting.
A great deal of editing, copying, collating and printing is involved in a competently prepared final document. This requires a lot of time expended, and the added stress of getting the document out in a timely fashion.
Unfortunately, I’ve served on boards where I received the board book just before I caught a plane or a train to attend the meeting in question. This last-minute rush is obviously stressful to the conscientious board member who wants to be adequately prepared for the meeting.
The Old Way of Doing Things
Let’s take a look at what might be going on behind the scenes in the old-fashioned preparation for a monthly board meeting. The CFO is pressed to have updated financials ready for the meeting. Inevitably, last minute changes do occur which means that the financial statements must be revised and resubmitted.
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Additionally, there could be legal issues that keep evolving as the time approaches for the meeting. Obviously, directors must be keenly aware of last minute legal developments that have an impact on the company’s financial and legal status.
There might be a pending acquisition. We all know that the details of such a transaction seem to change right up to the final closing and signing of documents.
Also, the company’s stock might make a dramatic change — for the better or for the worse — just before the meeting. Such a change has to be adequately explained before the board members can intelligently discuss its possible effects.
All of this sounds like managed turmoil. In a sense, it is, but things don’t have to be this complicated. That’s where technology keeps companies a step ahead of the competition.
Making Life Easier for Board Members
Let’s look at a new, modern scenario. Although the board book is always a work in progress, now everyone can work on it in a collaborative way, right up to the board meeting. Sounds great, doesn’t it? But how can this be done?
We all know of online collaboration, also referred to as file sharing. Now we have the technology to put the board book on a secure Internet site and have all interested parties contribute to it as needed. They can also enter a secure chat room to talk about needed modifications to the board book.
The process I’m referring to involves an electronic portal into which board members and support staff can “enter” to take a look at the evolving board book and make changes and suggestions as needed.
The Ever Evolving Board Book
If you think about it, the actual board book is not perfect until all interested parties agree that it is. Now all of the board members can have access to instant updates to the document as it is evolving and can even contribute to the updates. There are no last-minute surprises!
So, when the board member is ready to hop on a plane or train to get to the meeting, he/she is totally familiar with the document that will be discussed and has seen it honed to perfection. Changes that have been made to the document were made in a collaborative and seamless process.
Just prior to the meeting, the board member will likely print out the final copy and toss it into a briefcase, totally prepared for the meeting.
Besides the benefits mentioned above, there are other attractive options that come with electronic portals.
For example, the audit committee of a corporation can have a separate, dedicated Web site, and there is more time for board members to review the documents as they are being produced and revised.
Because all interested parties are looking at and working on a common document, this real-time collaboration makes it unlikely that a board member will appear at a meeting and voice objections to the board book.
The fact is that all board members are given the opportunity to work on the board book in a collaborative and transparent process.
Finally, there is the ability to have online approval of board minutes and resolutions.
All of the above benefits occur on a secure electronic portal.
What About the Board Member Who Isn’t Computer Literate?
Of course, you could have board members who either aren’t computer literate or just don’t want to be looking at documents online. They want to have a finished product in their hands. In this case, there is always the option of the company printing out the board packages and overnighting them.
Today, there are several industry leaders in corporate governance and board member software. One is OpenPages. Another is ComputerShare and its subsidiary, World Records.
Technology continues to assist corporations and their board members in complying with good board service and the latest legal and regulatory hurdles with which they are confronted. With technology, corporate governance becomes a lot more enjoyable.
Theodore F. di Stefano is a founder and managing partner at Capital Source Partners, which provides a wide range of investment banking services to the small and medium-sized business. He is also a frequent speaker to business groups on financial and corporate governance matters. He can be contacted at [email protected].
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