Modern Governance is “The practice of empowering leaders with the technology, insights, and processes required to fuel good governance”.
In practice, it means adopting a single, unified software platform to manage all aspects of governance, including board papers, minutes, secure communications, voting, collaboration tools, document sharing and more.
The best of these platforms bring much more to the table as they include analytics tools to interrogate the data they manage, revealing hidden connections and even discovering new risks and business opportunities that may otherwise have gone undiscovered.
They’re necessary because the digital age has brought challenges as well as benefits. The panel at Diligent’s Modern Governance roadshow’s Sydney edition was on hand to share their insights, take questions from the audience and trade boardroom ‘war stories’. They were:
- Jane Bowd: Group Company Secretary & Corporate Counsel at Coca-Cola Amatil
- Andrew Horne: Corporate Governance Professional, Lawyer, Chair and Non-Executive Director
- Melissa Jones: General Manager at Company Matters, a member of the Link Group
- Mathew Ronald: Director, EY and Board, Governance, and People adviser
This blog is a condensed and edited slice of their discussion.
Accountability is a hot topic in governance right now. High-profile scandals and governance failures have led to increased accountability, and many boards are reviewing how they approach minutes and note-taking. Towards the end of the panel discussion, an audience member asked about the notes board members and other board meeting attendees take:
“What do you recommend as best practice in terms of the status of those notes, because as soon as the board minutes are issued then those notes have to disappear somehow – and nothing really disappears in the electronic world. As a matter of fact, anything can be retrieved.”
Dispose of your notes carefully
The speakers all agreed that establishing the right practices and disciplines around notes and minutes is critical. Review procedures should be formalised, both for consistency and efficiency, and as a safeguard against information leaks. Directors must ensure they’re satisfied with the minutes, as they will become the permanent, official and legal record of the meeting. Melissa Jones:
The review process is so important. If the Directors feel that something is missing from the minutes, then that’s the opportunity to put it into the minutes – which is the formal record – not keep their own notes.
Documenting your procedures is another critical step. The panel agreed that after minutes have been formalised, meeting notes should be destroyed. This is an important part of your information security strategy. Documenting it as a formal procedure is also valuable if litigation arises or if you’re asked by a regulator why documents have been destroyed. Jane Bowd:
It’s better governance practice to [be able to] … pull up your policy to say ‘well that’s our company policy and we’ve been adhering to it for years’.
As an aside, Melissa Jones recalled a director who kept ten years of notes from board meetings in his garage. They were promptly disposed of – but it was clear he’d never considered the risk of having such sensitive information fall into unfriendly hands. Data hygiene isn’t a luxury; it’s a necessity.
Say your piece … or hold your peace
Concerns about scrutiny from regulators was a recurring theme. Directors are becoming aware of how important it is for minutes to accurately reflect their views, especially around contentious decisions or other matters where their views may diverge from their colleagues’. Matthew Ronald:
[Minutes should] reflect some of the discussions and thinking that was had in the boardroom and that that can then be communicated back to regulators, given that that is a much-heightened expectations test.
In a similar vein, directors must become aware that any of their communications across any platforms could be vulnerable to interception or subject to litigation. This strengthens the case for adopting a secure messaging platform, but it’s a message that hasn’t’ filtered down to everyone. Andrew Horne:
One of the challenges that we face is … how we eliminate all this trail of digital [information] … it’s not just the company; it’s outside and all the Gmails and other accounts … it’s a real issue.
Adopting good practices around minutes, notes and general data hygiene will go a long way towards protecting boards against data-related risks. The discussion was lively, and the audience’s responses made it clear that this was a high-priority issue for many. It’s certainly not going to go away, so prudent boards should act sooner rather than later to ensure their practices are up to scratch.
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