In the UK, corporate governance is evolving very rapidly, and boards must implement the changes across their organisations. To do this amidst all the pressures of running a business, the board requires technical support to facilitate its work. There are six areas of particular challenge to this implementation, and Diligent’s Governance Cloud helps boards address each one.
Challenge of Good Corporate Governance
In the UK, corporate governance is evolving very rapidly, and there is increasing pressure on boards of directors and management to implement the changes it imposes.
The board is charged with forging a culture of good corporate governance responsibility across the enterprise – indeed, it is only by creating such a culture that good corporate governance can be fully implemented.
In this full implementation, the entire set of rules set up to manage risk and assure compliance with regulations would be part of the skillset of every worker in the company.
‘The challenge of good corporate governance is that it doesn’t stand alone; it has to work in conjunction with a company’s mission and values statement to give directors and stakeholders a clear guide about how they should behave’, writes one expert consultant.
The right technology provides an invaluable support to overcoming this challenge. With the pressure for good corporate governance from shareholders, institutional investors, government and other stakeholders, boards need the support provided by the Diligent Governance Cloud to succeed in the implementation of governance across the organisation.
Want to improve your board performance? Learn what the 7 most exceptional board practices are.
Diligent designed the Governance Cloud with the processes of board directors, executives, general counsels and corporate secretaries in mind. No other company offers such a comprehensive array of software tools that are cohesive and connected to fully meet the corporate governance challenge today.
Diligent Governance Cloud meets 6 pain points
There are six major challenges, or pain points, that boards must overcome in order to implement good corporate governance. Diligent Governance Cloud addresses each one:
1. UK Compliance is an ongoing challenge
In the UK, changes to the national corporate governance framework are coming with increasing rapidity. For example, the publication in June 2o18 of the Wates Corporate Governance Principles for Large Private Companies has not only extended the reach of the official Corporate Governance Code to large private companies, but also instituted the principle of ‘apply and explain’, which works in tandem with the traditional ‘comply and explain’ rule. With a large organisation to run, board members struggle to keep up with the ramifications of such massive regulatory changes.
Diligent Governance Cloud provides the support board members need to keep up with this rapid evolution. The board portal includes a library of documents on UK corporate governance, and it is updated in real time. Diligent Insights streamlines the multitude of content directors receive by offering curated and personalised video and article collections exclusively for directors, tailored to each individual’s interests.
Board members can find all the background and sources they require with a few clicks.
2. Achieving a dynamic board composition
‘Among the most significant governance issues currently faced by the modern corporation is board diversity and independence’, writes Helen Kang, a governance expert at the University of New South Wales in Australia.
To achieve a distribution of skillsets, so that the board can take on complex areas like cybersecurity or supply chain management, boards must seek out both executive and non-executive directors with the skillsets it needs. And, because the major part of the board’s function is to protect the interests of shareholders and stakeholders, then it stands to reason that the board should comprise members who are representative of these stakeholders, Kang points out.
The Diligent Governance Cloud supports the process of nominating and appointing the right mix of directors. First, the chairman can communicate with the prospective nominee and the nominations committee in complete security, knowing that all calls, chats, written communications and related materials are safe with the highest level of encryption. Then, the sensitive process of gathering information about prospective board members can be supported by real-time exchanges, discussion and voting, all of which takes place in a secure environment.
3. Avoiding director conflicts of interest
‘Conflict of interest occurs when a controlling member of the company has other financial interests that could influence his decision-making or conflict with the objectives of the company. For example, a board member of a wind turbine company who owns a significant amount of stock in an oil company evinces conflict of interest, because the director has a financial interest in not representing the advancement of green energy. Conflicts of interest erode the trust of stakeholders and the public and potentially open the business up to litigation’, writes one commentator.
The Diligent Governance Cloud facilitates the investigation of all board member interests, ensuring complete transparency. There is an application for onboarding that will ensure that every nominated board member has no secrets.
To learn more about how to digitise your governance needs in the boardroom, check out the Governance Cloud and see how Diligent can meet your board’s needs.
4. Composing robust board meeting minutes
In the UK, board meeting minutes are a legal document, one that may be called upon in lawsuits or criminal proceedings to defend board members. It is critical that boards enable accurate and carefully composed minutes – in fact, the failure to do so leaves boards subject to prosecution.
Diligent Minutes, a Diligent Governance Cloud application, is a minute-taking and action management workflow tool that makes minute-taking more efficient, via powerful features that are integrated directly into the Diligent Boards™ platform and workflow. The secretary only needs to take brief notes, and the software creates a professional-looking record of the minutes.
5. Assuring communication with management, among committees
It is a firm principle of UK corporate governance that, although committees do some of the work, and management does part of it, it is the entire board that is responsible for all strategy and policy.
Diligent Messenger, part of Diligent Governance Cloud, makes it possible for board members to communicate securely with management and among committees in complete security. All communications are protected from threats with the highest level of existing safeguards, and these are upgraded in real time. All communications can be recorded and saved with a click.
6. Archiving communications and written documents
Boardroom communications, communications with management and all external communications (i.e., with shareholders) must be archived according to legal methods in the UK.
The Diligent Governance Cloud provides all the means necessary to archive communications according to legal requirements. It’s easy and it takes only a few clicks to accomplish.
Learn more about the importance of using secure communications technology in the boardroom with this free white paper.
Diligent Governance Cloud supports good governance
Even while the market has placed the importance of practising good corporate governance in the limelight, governance solutions have lagged behind risk and compliance solutions.
Diligent designed the Governance Cloud with the processes of board directors, executives, general counsels and corporate secretaries in mind. No other company offers such a comprehensive array of software tools that are cohesive and connected to fully meet the needs of today’s board of directors.
The few governance solutions that are in the market today have largely been fragmented and disconnected from other processes. Board directors, general counsels and corporate secretaries are realising the need for governance solutions that help them manage governance activities effectively and efficiently. Boards need products to help them streamline duties for compliance, regulation and governance, while keeping all processes in a highly secure, confidential platform.
The Governance Cloud, the only integrated enterprise governance management solution that enables organisations to achieve best-in-class governance, is an ecosystem of software tools that digitises the various activities and tasks for the board of directors. As organisations grow more complex and regulations more stringent, the scope of governance responsibilities evolves. The Governance Cloud allows boards of directors to meet the demands in the boardroom and beyond with the ability to select the products they need that help them perform their best and work within their allotted budgets.
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