The Co-Sec’s guide to drafting a board communications policy

Author and former presidential speechwriter James Humes once said, “The art of communication is the language of leadership.” For company secretaries, who guide so many aspects of board meetings and corporate governance, a strategic and secure communications policy is paramount to success.

Drafting a communications policy that facilitates an open dialogue among board members, corporate management and shareholders, while also protecting the company’s interests and information, falls on the company secretary. It’s a balancing act, but when done effectively, the impact on an organization can be significant.

There are two parts to a complete board communications policy: the basic policy itself, which should provide rules for both internal and external communication, and a broader, more philosophical set of best practices that permeate all board-related communication. What follows is a set of guidelines designed to help company secretaries optimize all aspects of board communication.

External Communications

Outline Shareholder Dos and Don’ts

To tackle external communications, start by considering shareholder needs. Try to predict what investors want to know about the company in the future, and the digital or analog path they’re likely to take in order to get that information. A board communication policy should include:

  • The secretary’s contact information for written and electronic communications
  • The company’s procedure for handling communications addressed to the board (for example, noting that these will be assessed by the company secretary and routed accordingly)
  • Authorized spokespersons for public communications and an overview of their duties
  • An example of inappropriate board communication, including inquiries of a personal nature and individual complaints. Many companies, such as the Intercontinental Exchange, make a point of publicly discouraging mail that “could not reasonably be construed to be of concern to security holders or other constituencies of the Company”

These points become the foundation of the board communications policy, which should be made available to the public on the company website and updated on a regular basis.

Keep Shareholders Engaged

Equally important to enabling communication with the public is engaging with shareholders, from relaying key company information to becoming a skilled storyteller able to entice investors with the company’s greatest feats.

Brendan Sheehan, the managing director of market research firm Rivel Research Group, explores the evolution of shareholder engagement in The Corporate Board Magazine. Sheehan reports that investors are viewing corporate governance as an “investment differentiator,” and that has companies reassessing the way they interact with these parties.

“The investor relations officer is a crucial liaison, and the board of directors plays an important role,” Sheehan writes. “However, more corporations find the corporate secretary brings both the skills and credibility needed to tell your company’s story.”

Just how important is the ability to keep shareholders engaged? According to Rivel Research Group’s 2016 Corporate Governance Flashpoints Study, 30 percent of North American institutional investors report that corporate secretaries are currently the primary handlers of investor communications, while 33 percent say that responsibility falls to investor relations officers. When asked who should be responsible, 39 percent name corporate secretaries, far surpassing every other board-related role. Meanwhile, in its 2016 Board Practices Report, Deloitte reveals that 41 percent of corporate secretaries “are engaging more with shareholder groups.”

The secret to optimizing shareholder communications and keeping investors actively engaged is understanding the audience. Identifying and researching the company’s shareholder base provides secretaries with valuable insight into what matters most to these investors, thus informing the board meeting agenda. This approach can also help company secretaries gauge the effectiveness of that all-important company story.

Internal Communications

Maintain an Open Dialogue

Effectively communicating with board members and executive management ranks high on the company secretary priority list, which makes it another principal part of the policy. Implementing an internal communications strategy that’s reliable, secure and easily accessible to all directors is, after all, an essential part of good corporate governance, as Diligent notes.

Consulting and business advisory firm Deloitte’s report on the changing role of the company secretary highlights the importance this dialogue. “The company secretary is a unique interface between the Board and management and as such they act as an important link between the Board and the business,” the article says. “Through effective communication, they can coach management to understanding the expectations of, and value brought by the Board.”

Between consulting with the chairman about the meeting agenda and getting new board members up to speed, there are countless opportunities for company secretaries, directors, and the C-Suite to interact. By keeping an open line of communication, making themselves available and encouraging face-to-face meetings when possible, company secretaries can better monitor the board to make sure it is living up to its responsibilities, and anticipate potential problems, making them more effective all around. Soft skills like eloquence, active listening and loyalty demonstrate the dependability that executives need to see in order to share confidential information. Establishing an open door policy is another way to show the C-Suite that a company secretary is ready and willing to hear what they have to say.

Safeguard Business Messaging

Before they can apply their expertise to providing director and chairman support, however, company secretaries must streamline the flow of information. A strong board communications policy should include a defined toolset that the secretary, board members and management team can use to access and exchange information. Board portals serve this purpose by keeping meeting materials secure, but what about business messaging? If board members default to email or text messaging to communicate, they’re putting themselves — and the company — at risk of password hacks and data breaches that could have a devastating effect.

Adopting a platform like Diligent Messenger, which can be used via mobile phone, tablet or desktop computer, allows company secretaries to ensure that all parties are always able to retrieve key information regardless of where they are. Security features like Touch ID, message encryption and access settings designed to prevent accidental leaks assure users that confidential information stays that way. At a time when security incidents are increasing dramatically year over year, as reported in IBM Security’s 2016 Cyber Security Intelligence Index report, there’s no better time to safeguard board communications.

When tasked with managing the ongoing exchange of information and protecting a company’s most valuable data, company secretaries must prioritize constructive communication and fail-safe security. Only then can boards and the companies they represent function to their full potential.

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