With rapid change affecting businesses (including growing emphasis on environmental, social and governance (ESG) principles and the COVID-19 pandemic), it seems organizations are called on to be more: more informed, more collaborative and more responsive to stakeholders. The systems and processes that businesses need now are encapsulated in the concept of modern governance. Organizations are relying on modern governance to navigate today's complex business landscape.
'Good governance to me is being able to maintain sound business practices within whatever the regulatory guideline is. Making sure our information is safe. Making sure that our directors have the information that they need in order to make the decisions they need to make, when they need to make them. Diligent allows us to do all of that.' - Matt Muller, Legal Operations Manager and Corporate Secretary, Farm Credit Mid-AmericaIn September, more than 2,000 executives and professionals from legal and governance disciplines around the globe gathered virtually for Diligent's Modern Governance Summit 2020 to discuss security, risk, data governance and corporate responsibility. Two sessions covered in detail the ways to optimize virtual board governance. The first session described how clients leverage board management technology to improve their virtual meeting processes, while avoiding security risk. The second session took the discussion further, describing how clients use the same board governance technology to build agendas, to take meeting minutes, and even to onboard new directors virtually.
'The silver lining of COVID is it's making us take another look at our processes and how we can do them better. How could we do them more securely? How could we make things easier for our users?' ' Lisa Pascoe, Vice President of Governance & System Effectiveness, Sparrow HealthOptimizing board governance is critical now. Since most businesses have set themselves up to work remotely, avoiding mistakes and maximizing the value of virtual technologies is essential. It will remain so even when the pandemic has subsided: Most prognosticators agree that our 'new normal' will not be a return to 2019's way of doing things. Directors and other stakeholders will insist on preserving the flexibility and efficiency they've discovered in remote work. Yet it's important to continue the transition to virtual board governance without opening up the organization to risks and inefficiencies. With that in mind, what are some common mistakes in transitioning to virtual board governance that professionals ought to avoid?
1. Incomplete TransitionsOrganizations today may use the same rapidly-assembled, swiftly-implemented stopgap virtual board meeting solution they've used since the pandemic began last spring. Now these organizations must complete the transition. It's a matter of choosing to move forward with a full-featured board governance technology solution, or to roll back to practices from 2019 once the pandemic is over. Remaining with current stopgap solutions incurs two risks: one, that the stopgap solution isn't secure, and two, that dis-integrated virtual meeting tools can't deliver optimal efficiency.
2. Abandoned TransitionsSome organizations have found themselves in mid-transition when the pandemic struck, and that is a potentially-hazardous place to be: Overlapping sets of data may reside in different systems, introducing greater risk of a breach, and hindering efficient collaborations among board members. Once an organization acknowledges that its current virtual board meeting solution has been in use far longer than they'd anticipated, they'll want to take definitive action. They may roll back to their way of doing things from 2019, or move forward with modern governance technology to support virtual board meetings and other board operations.
3. Assuming Transitions Are TemporaryWhen the current pandemic began, moving to virtual board meetings was among organizations' top priorities. Now, virtual work has become the new long-term reality, and most professionals agree there'll be no going back to a full schedule in the office, or traveling for every meeting, once the pandemic is over. Meanwhile, business leaders are still struggling along with hastily-assembled stopgap solutions that were implemented under original emergency conditions last spring. Now, business leaders should consider a complete, integrated and secure solution that anticipates a hybrid schedule of routine virtual meetings complemented by occasional face-to-face ones.
4. Mixing Secure and Unsecure Systems TogetherBecause organizations had to develop virtual processes for governance so suddenly as the pandemic began, they may find themselves managing a mix of tools that includes public virtual meeting services, 'private' in-house file shares and enterprise tools for email and texting. Using some more-secure components among less-secure components can create a perception that the entire solution is secure when it isn't. In addition, switching between platforms for virtual meetings, file sharing, email, texting and other functionality hampers the natural flow of collaboration that a fully secure, fully integrated platform promotes.
5. Not Taking Full Advantage of Virtual Governance's BenefitsWith the onset of the pandemic, several firms did take the opportunity to modernize their governance. They purchased leading board management technology, and implemented the components they needed most urgently. They may have adopted only the systems and processes most relevant to their rapid transition to remote work. Now it's time to revisit implementation decisions and maximize the value of board governance technology investments. Once an organization acquires board governance technology, they'll want to maximize use of all the efficiencies it offers:
- Digitizing manual, administrative processes like book-building, board evaluations, directors' and officers' questionnaires, minute-taking and approvals.
- Protecting video conference links by using the technology's calendar feature.
- Streamlining voting and resolutions to collect approvals and signatures securely.
- Discussing board books and other materials with familiar messaging features.
- Sharing files securely with collaborative workflows.
- Onboarding directors virtually.
For most organizations, pursuing modern governance will mean not only tools to support virtual board meetings, but integrated, secure, closed-loop technology for board evaluations, new director onboarding, directors' and officers' questionnaires and strategic planning.Most organizations have had to transition to virtual tools and processes in haste. Meanwhile, governance professionals have come to see the benefits of virtual collaboration. Leading organizations are now deciding it's time to act on users' growing commitment to a new, virtual approach to board governance.