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Risk Management Using a Paperless Boardroom

You’ve finally decided to bring your board of directors into the 21st century by going paperless — congratulations!

So, now what?

Online board portal software offers board members unparalleled flexibility, mobility and security, but it’s important to understand that this kind of software is not entirely without risk. Anything done online contains some level of risk — although there are many things that can be done at the individual level, as well as the organisational one, to fend off e-intruders.

Here are some tips on how a paperless board can manage risks:

1. Choose your board portal wisely. Not all board portal software is created equal, so do some shopping before settling. Make sure all of the company’s executives and its IT team know which options you’re considering, and involve them in the decision-making process. Choosing software may seem like just one more thing to check off a to-do list, but you’re effectively choosing a home for your organisation’s most sensitive information. It’s important to make the decision out in the open.

In terms of what to choose, prioritise security features — for example, remote wiping in the event a member’s device is lost or stolen. But don’t sacrifice user experience for security. Something as seemingly innocuous as an annoying design feature can dissuade members from using the board portal, and lack of uniform compliance can expose everyone on the board to more risk — so make sure all of your board’s members agree on the chosen software before pulling the trigger.

Download or consult some of Diligent’s board resource guides to get a snapshot of how board portals work and how they can help organise boards.

2. Enforce compliance. As a recent report by the New York Stock Exchange Governance Services and Diligent indicates, there are almost as many ways to handle board documents as there are board members. Many respondents to that survey said that they regularly download board materials to their personal devices, and that they use personal email accounts to conduct board business. Both of these are major security faux pas, but it may not be so obvious to some individuals. They may not realise how easy it is to hack password-protected email accounts, or how easy it is to swipe personal tech devices.

Hire a security expert, or invite a security representative from the board portal you choose, to hold an online security training session for board members, executives and IT staff. Have them explain the best practices for interacting with the board portal, and also have them speak about general online security. A common refrain when a risk is unwittingly introduced is, “I didn’t know.” Help mitigate that sentiment by working proactively to nip potential compliance issues in the bud.

3. Embrace the technology. It’s easy to look back at pre-Internet board processes and long for the good old days. But things were not necessarily more secure when everything was on paper. Filing cabinet locks aren’t foolproof. And how many sensitive documents have been left out in the open — or worse, forgotten — over the years? Earlier this year, British Prime Minister Theresa May’s January travel plans, which included the address of a hotel where she would be working, were forgotten on a train, as The Guardian reported. These absent-minded slip-ups put organisations and government agencies at risk.

It may seem counter-intuitive to centralise all of an organisation’s or an agency’s most sensitive data in one place. One breach, and everything may be subject to exposure. But having one document saved on the board chair’s tablet and another document saved on the treasurer’s iPhone, and then printing out board packages and sending them to an out-of-town member via courier, is far riskier. A secure board portal that lets members consolidate documents, minutes, communications, calendars, to-do lists and more keeps steps, hands and slip-ups to a minimum. Keeping all of your relevant documents and tools in one place also helps streamline tasks, making the individual board members, and the board as a whole, more efficient than ever before. Request a demo of the most secure board portal software on the market today.

Conclusion

Board portal software has revolutionised the way today’s boards operate — but it can only do so much if the board is lacking in the governance department. A board portal can’t fix board members who are poor communicators or who lack discipline. But board portal software can help improve governance by standardising the board’s operating procedures, issuing reminders about upcoming meetings and task completion dates, and offering each individual board member — even those who tend to be on the quieter side — a way to collaborate in a meaningful way.

A paperless board can offer the kind of standardisation and efficiency the board chair (and the board secretary!) crave and the accountability stakeholders demand.

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