Best practices for board of directors voting
Boards of directors share a long history of meeting in person. The general concept behind face-to-face meetings is that they allow for strong communication through robust discussion and an exchange of ideas. The tone of in-person meetings can be influenced by a board director's rate of speech, volume of speech, body language and tonal quality, among other things. It's long been held that attendance at board meetings was essential to support the fiduciary duties that all board members have. Voting is critical to the future of their organizations. It's important that boards preserve the integrity of the voting process as boards begin to move that process to the tech space.
Technology is challenging many of those longstanding philosophies. In some respects, in-person meetings are becoming an outdated luxury that can hold up urgent or pressing board decisions. Any number of issues may keep board directors away from the boardroom. Weather-related travel can cause meetings to be delayed or canceled. Getting the best talent for board directorship often means selecting board members from across the miles. As corporations increasingly find technological solutions for nearly everything they do, it's becoming clearer that manual processes, including board voting, are not the most efficient use of board directors' time.
In today's marketplace, it's less a matter of moving to software solutions for electronic voting and more a matter of preserving the integrity of the process and utilizing the features that make board work easier and more efficient. Best practices for voting require a high level of security and clear communication.
Email Presents Unworkable Solutions for Board of Directors Voting
The voting process is critical to the future of corporations. In the interest of saving time and money, many corporations changed their bylaws and took a shot at allowing votes via email. It wasn't long before they discovered the numerous challenges that come with voting via email, many of which fall out of line with best practices for voting.
First, there's the issue of the legalities of alternative voting. For votes to be valid, they have to be taken at a legal, valid meeting. State laws outline whether they allow email voting or voting by other means. In addition, boards have to make sure that their bylaws also allow voting that occurs outside the boardroom if they choose email or electronic voting.
Best practices for voting suggest that voting via email is too casual a process for something as important as voting on important corporate matters.
There's also a problem of semantics with regard to email voting habits. Email senders may not make the subject line clear enough to get board directors to open and read the email. Another issue is when a sender fails to correctly type in the recipient's email address and one or more board directors don't get the important email voting details at all. Corporate secretaries may opt to solve this problem by utilizing the 'read receipt' feature on the email account. That is, of course, if they remember to set it up.
Email voting poses problems on the receiving end as well. A board member who hits 'reply all' may compromise any attempts at anonymous voting. There's also an issue with how board directors respond to email voting. If each board member responds with a different answer format, there's no consistency in the responses, which could lead to someone challenging the integrity of the vote.
Votes that boards complete via email must be tallied by a human being, which again nullifies anonymity. While board directors can complete the voting process quickly via email, they may not get the results of the voting right away.
The biggest negative to using email accounts for voting purposes is that they're simply not secure enough to use for applications like voting because security for personal and business email accounts is minimal at best.
Best practices for board of directors voting require that votes be adequately controlled, transparent and properly recorded. The only way to do that is with electronic voting in connection with a highly secure board portal platform.
Rules for electronic board of directors voting should be specific enough to include detailed procedures for sending and receiving votes. The rules should outline how boards should handle a situation where a board director unintentionally submits a paper ballot and an electronic ballot. After changing bylaws to account for electronic board of directors voting, boards should have a qualified attorney review the wording to make sure it abides by the law and satisfies best practices for electronic voting.
Board Portal Technology Supports Best Practices for Board of Directors Voting
A good basic start for boards to move to electronic processes is by implementing a board portal platform that was designed with board work in mind. The right portal and software tools allow for simplified and secure communications between board directors. The best board portals are intuitive, user-friendly, and offer 24/7 live customer support and bolster all aspects of good governance.
Board directors also need board portal platforms that work for them wherever they are, which means being able to access them by mobile devices such as cell phones and tablets.
Board portals provide an efficient and cost-effective solution for conducting all areas of board business within a highly secure platform.
Diligent Boards took these issues into account when designing Governance Cloud, a total software solution designed especially for corporate boards. Diligent Boards is more than a board book software solution because the program fully integrates with other useful board tools, and board directors can access their log-ins securely online or offline.
Diligent has incorporated state-of-the-art security methodologies into all of its products, including robust encryption for the most secure suite of software solutions available.
Diligent understands the necessity of electronic voting tools that support best practices for board of directors voting. That's why they created a built-in Voting & Resolutions feature, so boards can vote on important issues and resolutions with the capability to get results in real time.
In fact, Diligent recently added six exciting new enhancements to the Voting & Resolutions program.
- Quick voting: vote for/against and get results in a click
- Voting without signature: vote yes/no or for/against/abstain without using a signature
- Anonymous voting: boards vote and get results without revealing individual votes
- Voting w/comment box: allows directors to add comments explaining their vote
- Results tallying: provides a real-time summary of voting
- Signature overlap: applies electronic signature across multiple boards on the same platform
Diligent provides the strongest and most fully featured board of directors voting tools available for multiple voting purposes like voting on unanimous consents, approving policies, approving meeting minutes, approving committee chairs, votes on external director resumes, getting signatures on regulatory forms and much more.
Best practices for board of directors voting requires using software solutions that follow good governance and make the work of boards easy and efficient, as the new voting enhancements demonstrate. Diligent's electronic voting solutions preserve the integrity of board voting process while maintaining the necessary level of security that every board needs.
