Boards are experiencing the most rapid period of digital transformation in a generation. Unable to meet face-to-face due to restrictions in place to combat the Covid-19 pandemic, Boards are pivoting to virtual meetings to help the companies they serve navigate one of the most challenging periods in human history.
Virtual Board meetings are not new, but until now they have been considered very much second-best compared to getting everyone into the Board room. However, something that used to be a sporadic convenience has now become an absolute necessity and there is still a lot to learn about the best ways to manage virtual Board meetings. Whether that is secretariat teams getting to grips with the governance and logistics requirements of running and minuting virtual meetings, or Directors getting a handle on meeting etiquette, everyone is having to adapt rapidly.
In a recent webinar the Diligent corporate governance community has been sharing its experiences and tips for emerging best practices that Boards should consider as they engage with a different way of doing business and asking whether the current situation will lead to lasting change.
Free Download: Virtual Meeting Toolkit
Strategic change: resetting governance around Board meetings
At a strategic level, Diane Smith-Gander AO, Non-executive Director of Wesfarmers and AGL Energy, says the situation offers a valuable opportunity for Boards to step back and re-examine their approach to meetings. “I’m seeing that we’re going back to really good practice and jettisoning bad habits that may have crept in over time. We’re seeing a welcome reset of people asking, ‘what is this meeting for? What are we trying to achieve?’ and thinking very carefully about this. Chairs and Company Secretaries are really paying attention and are very focused on this different mode of meeting.”
Andrew Horne, Lawyer and Principal Consultant, Corporate Governance, agrees there is pressure on governance professionals to get virtual meetings right, noting: “They need to be particularly mindful of the post-meeting review, in terms of timely market disclosure and sharing of confidential materials.”
But before a meeting can take place, Andrew advises that the top priority for every governance professional is to make sure that the company constitution and byelaws permit the Board to meet virtually. Many authorities and regulators are allowing flexibility around virtual meetings at the moment, but the situation is changing, so it’s essential to consult Counsel to verify that a virtual Board meeting is permitted.
Related Article: Best Practices for Conducting Remote Board Meetings
Key to a successful virtual board meeting is prior planning to pre-empt any problems.
Ace the agenda: Andrew Horne advises companies to review their agenda and make sure it is fit for purpose and can work within the format of a virtual meeting: “Be flexible with the agenda and the relationship between the Chair and the governance team is critical to that. The purpose of the meeting must be clear, including the resolutions to be tabled.”
Some common Board meeting activities, such as presentations from business departments, may not work so effectively in the virtual format, evaluate whether these should be delivered in different formats, such as reports shared securely prior to the meeting. Also consider the length of the agenda – it is much harder to concentrate for long periods when meeting remotely, so this should be taken into account when planning meetings.
Check the tech: The conferencing technology available to support virtual Board meetings is now very sophisticated, but this doesn’t mean all directors are comfortable with it. Hannah Stewart, Executive Assistant at NZ Post, advises secretariat teams to have a one-to-one session with each director prior to the meeting to iron out any issues. “We found some Directors were fine, but some needed help. Some needed to download apps and other preferred calling in on their phone and using their laptop to review meeting materials in Diligent Boards,” she recalls.
Set expectations: Share an etiquette document in advance explaining how the meeting will work, the protocols for muting participants and whether video will be used all or part of the time. If video is to be used at certain points, it is helpful to add a note next to the relevant agenda item prompting directors to turn cameras on. The document should also explain how directors should attract the Chair’s attention if they have a point to raise, how features such as chat boxes will be used and whether text interactions will constitute a formal, minuted element of the meeting.
Secure your assets and channels: As Diane Smith-Gander points out, “we are now in a world where a lot more information is being shared electronically and this raises security risks.” Organisations using Diligent Boards can be confident that their meeting materials are ultra-secure, but what about the videoconferencing dial-in details? Sharing these by email runs the risk that emails are hacked and bad actors can potentially eavesdrop or disrupt Board meetings. Diligent has recently launched a feature enabling conference dial-in details to be incorporated securely into Board packs, so when the time comes all the director need do is click the button.
Challenges for the Chair: As in any Board meeting, the Chair plays a crucial role in making sure governance objectives are achieved. However, in a virtual format the challenges are a little different. Visual cues are less easy to read so it can be hard to spot when a director would like to intervene, or alternatively when a director is not engaging with the topic. The Chair must actively manage the meeting and may need to adopt a more formulaic approach by going round the virtual table to proactively request input on each item. Andrew Horne says: “Each resolution needs to be worked through very carefully and it may take longer to get through the formal process with roll calls of directors to make sure we clearly hear comments and disclosures. There needs to be a closer focus on process to ensure we hit compliance targets.”
Share meeting management and minuting tasks: It can be difficult to manage the technical logistics of the meeting at the same time as trying to keep track of attendees and take accurate minutes – especially when it is be harder to work out who is speaking. It’s a good idea to have separate people monitoring the technology aspects and taking minutes.
Free Download: Company Secretary Checklist
Looking forward – will 2020 prove a watershed for virtual Board meetings?
Consensus seems to be forming that there will be a place for virtual Board meetings in the corporate governance calendar as we adjust to the new normal. Hannah Stewart of NZ Post expects to see a hybrid approach with more virtual meetings: “Directors are appreciating them. They are very focused now, taking a lot of action in a short space of time. Virtual meetings are allowing them to cut out the nice-to-have and focus on the need-to-have.”
This enhanced focus is something that Boards should evaluate going forward, believes Diane Gander-Smith: “We have to think about changing the Board agenda to make better use of time. What was the purpose of having directors in meetings all day from 8am-5pm?” Boards need to ask whether virtual meetings should try to mirror that approach, or does this actually represent an opportunity to reset our approach to Board meetings even more and ask how much of it we need to keep and how much we can afford to eliminate while still fulfilling director duties in an effective way.
For more great insight into virtual Board meetings from the Diligent Corporate Governance Community, watch our webinar.
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