Digital governance tools have been embraced by boards across the globe, but many organisations have not yet taken full advantage of the benefits on offer. The reason? Too many companies have taken a piecemeal approach, digitising some processes but not others, or adopting different tools for different tasks.
The disadvantages of such approaches are clear: incomplete processes, incompatible systems, insecure data and more. Specifically, problems can arise around:
- Email and communications: Personal email is being used for board communications, exposing sensitive information to security risks.
- Minutes, board papers and document sharing: Incompatibilities between different systems make management and security more difficult and can create vulnerabilities.
- Crisis management: Current technologies can hinder rather than help in a crisis, making it more not less difficult for boards to coordinate a response.
- Information management tools: No ‘single pane of glass’ for security, document management, voting, minutes etc.
- Insight and competitive advantage: Boards aren’t using technology to generate insights, so opportunities for product and service improvement remain undiscovered.
Forrester’s 2018 report Directors’ Digital Divide: Boardroom Practices Aren’t Keeping Pace With Technology explores these challenges and more, noting that ‘The stakes have never been higher for professionals to manage critical issues like cyber risk, regulation, culture and ethics … Boards cannot continue to rely on poor security practices and outdated approaches’.
Email and communications
Critically, Forrester found that more than half (56%) of all board members use personal email to share and discuss board information; nearly half (47%) use instant messaging apps and services; and nearly one-third (30%) have lost or misplaced a phone, tablet or laptop in the last 12 months.
These are severe risks, as cyber-crime rates are rising. CSO recently reported that ‘Email is still the problem’ when it comes to security, with Verizon finding that 92% of malware is delivered by email. Using insecure communications systems, like consumer-grade apps and services, exposes boards and their companies to needless – and avoidable – risks.
Minutes, board papers and document sharing
With so much data being generated, it has never been more important for companies to store, secure and manage their information. Legal requirements for security and privacy are becoming more stringent, like Australia’s mandatory data breach notification scheme, the EU’s General Data Protection Regulation, and various US laws including the Federal Trade Commission Act (FTC Act), Financial Services Modernization Act (FISMA) and Health Insurance Protability and Accountability Act (HIPAA).
This makes it vital for companies to protect minutes, records of votes and resolutions, and to ensure only the proper individuals have access to them. Forrester found that nearly half (49%) of boards find it challenging to secure documents and board materials, and control access.
When a crisis situation emerges – whether product-related or legal in nature, or even due to a natural disaster or other ‘act of god’ – boards must be able to quickly and securely coordinate a response. Information must be shared and protected and decisions made with proper regard and consideration for both legal and moral responsibilities.
Crises are a foreseeable risk; Forrester found 30% of boards had experienced a crisis situation in the last two years. They come at a high cost (IBM has found the average cost of a data breach is USD$4 million), and Forbes notes that a key factor in an effective response is leadership acting with urgency. Only a tool that combines secure, multi-channel communication with document-sharing, remote access and other technologies will give boards the tools they need to meet such challenges.
Information management tools
Any IT manager will tell you that managing documents across different systems risks duplication, loss and security problems, and that not all storage and management tools have the required level of security, comply with data sovereignty requirements, or provide easy access when required.
Yet with digital transformation an acknowledged priority for most businesses (Gartner estimates 90% of large companies will have a chief digital officer by 2019), still less than one-third (30%) of governance responsibilities are being solved with technology, according to Forrester. The benefits of using a single tool or platform to provide a dashboard or ‘single pane of glass’ view of critical information are well-known (for example, BCG estimates that digital business processes can be five times faster than traditional systems); all that remains is for boards to take advantage of them.
Insight and competitive advantage
Housing multiple data stores and sources (like email and messages, minutes and agendas, board papers and other documents) on a single platform allows businesses to generate business insights and even competitive advantage. ‘Crunching’ their data allows businesses to better understand their risks, view governance scorecards and tackle vulnerabilities – ‘yet few boards currently use this technology’, according to Forrester, noting poor uptake of the capabilities offered by technology:
- Driving insight on company operations: 24%
- Understanding of the areas of greatest risk: 23%
- Increasing version control of board documentation: 22%
- Managing CAP tables: 19%
- Having scorecards of key governance categories: 19%
These are significant opportunities missed; according to a Statista survey, expected benefits from analytics include improved risk portfolio management (42%), more informed underwriting decisions (31%) and improved regulatory compliance (14%). Yet many companies already have the tools in place to generate such insights, according to Forrester: 54% of boards in Asia Pacific, 48% in Europe and 32% in North America. All they need to do is use them.
Board management is the solution
The best way for any business to address all of these concerns is simple: adopt an end-to-end governance platform. This will allow boards, and the organisations they oversee, to enjoy all the benefits of secure and unified communication, access to information regardless of location, the ability to record votes and minutes remotely, generate business insights, and more.
As Forrester notes, “Boards cannot continue to rely on poor security practices and outdated approaches to keeping their sensitive board matters and materials safe from cyberattacks. Board management technology that provides end-to-end governance management is required— the ability to safely communicate and collaborate, make decisions, and use their limited meeting time in the most effective manner is paramount”.
Diligent’s Governance Cloud provides these abilities and more. It provides a comprehensive, end-to-end suite of tools that enables organisations to achieve best-in-class governance, compliance and security. Its extended capabilities include insights, voting & resolutions, entity management, conflict of interest management, minutes, evaluations, messaging and more. It’s not simply an integrated enterprise governance management solution, it’s a platform on which to build your business.
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