Adjusting Governance Models to Deal with Modern Governance

Nicholas J Price
Whether people realize it or not, good corporate governance is important to us all. Every individual in every community is affected by whether organizations govern poorly or well. A modern governance approach is necessary for today's organizations to deal with the pressure and scrutiny around boardroom diversity and composition. Comprehensive data and analytics are necessary components for boards to be able to identify governance risks and to spot opportunities to improve the board through enhanced networking, which can link board composition to long-term strategy and value creation.

Governance models haven't necessarily kept pace with modern governance principles and practices. The rapid pace of corporate governance requires updates and changes in how boards oversee organizations. Modern governance means that boards need to use the advances that technology brings to help them adjust current governance models to meet today's complex governance needs.

No matter what governance model your board subscribes to, Diligent has the most innovative digital solutions to successfully modernize your boardroom.

What Is Modern Governance and Why Does It Matter?

The lack of data, visibility and security creates gaps in governance. These deficits set up board situations in which leaders don't have the right information at the right time, which makes it impossible for them to ask the right questions. The lack of visibility means that boards can't see into the company, across the industry or into the future. Many leaders lack the proper tools to help them communicate, collaborate and share sensitive data using a secure platform.

Modern governance benefits boards by transforming them into engaged partners with their stakeholders. The concept of modern governance is forward-looking and provides a strategic advantage in a time of enhanced risk and disruption. Tools for modern governance ensure strong security for the organization's most important data.

Modern governance is the practice of empowering leaders with the technology, insights and processes required to fuel good governance. It puts the most appropriate digital tools and intelligence at the fingertips of board directors and their leadership teams. Modern governance tools and practices equip boards with the information they need to ask questions and to address red flags before situations get out of control. It's essential for today's boards to have efficiently directed workflows so that they have the proper time to focus on the most pressing issues.

Modernizing Your Boardroom

The National Association of Corporate Directors (NACD) and Diligent Corporation have joined forces in the United States to help NACD members modernize the boardroom and improve the level of board performance. The goal is to improve the level of board performance by providing access to real-time, critical data that has a positive impact on board effectiveness and the board's ability to make data-driven decisions.

Through Diligent's market-leading technology and NACD's robust network of board directors, Nom Gov is a game-changer in governance technology. Nom Gov helps board directors to spot issues surrounding boardroom diversity, composition, effectiveness and risk profile to position boards to elevate their performance.

Nom Gov improves the quality and efficiency of board discussions by providing up-to-date intelligence and profiles on companies of interest. The tool can be of great value to nominating and governance committees working on succession planning by providing them with an extensive, diverse global database of executive profiles.

The modern boardroom has several distinct and important characteristics. The concept of modern governance means that boards would have the same data available to them as proxy advisors have. Modern boards are accountable to all the external stakeholders for their fiduciary duties and their role in good governance. Modern board directors are expected to be proactive, having the proper information at their fingertips to address board diversity, ESG concerns, succession planning and competitive moves. Modern governance tools like Nom Gov help boards to evaluate their performance versus that of their peers.

Today's boards need the ability to be able to identify potential governance or reputational risks in their externally facing profiles. Modern governance tools help them to know how institutional investors, activist investors and potential acquirers view their reputation, so companies can gain their support.

The modern boardroom assesses its performance on an ongoing basis. Today's board directors evaluate their performance across multiple dimensions, including diversity and composition. They must ensure that their boards have the capacity to extend their networks beyond the core to enhance networking opportunities.

Modern boards take control by using all the available tools to enable them to exercise good governance, starting with building a highly effective and diverse board with the composition and skillset it needs to reduce reputational, governance and activist investor risks.

What Does a Modern Governance Product Solution Look Like?

A modern governance product solution consists of an integrated suite of tools that allows organizations to govern seamlessly. NACD and Diligent's Nom Gov application provides nominating and governance committees with the ability to enhance their succession planning efforts through an extensive, diverse global database of director and executive profiles.

Nom Gov is a modern governance tool that helps boards evaluate their skills and expertise in relation to those of their industry peers to gain insights into their strengths and weaknesses. The tool helps to improve the quality and efficiency of board discussions by providing up-to-date intelligence and profiles on companies of interest.

Nom Gov helps boards stay up to date, identify opportunities and reduce governance risks, by providing them with access to the largest growing global governance data. Diligent's Nom Gov is integrated directly into the Diligent Boards platform, which sets the stage for improved quality and efficiency of board discussions.

Nominating and governance committees can use Nom Gov to fine-tune their efforts through the use of an extensive, diverse global database of executive profiles.

Diligent has a customer base of over 650,000 users in more than 90 countries across the globe. The Diligent board management software solution equips today's boards with the tools they need to do the right thing, which is in keeping with all governance models.

The current corporate business environment is constantly moving and evolving. It's necessary for boards to have the right technology infrastructure in the boardroom to empower themselves with the essential framework to meet governance challenges head on. Diligent Corporation gives boards a competitive edge to improve governance by having the right information, analytics and insights to spot risks, act on opportunities and turn insights into action.
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Nicholas J. Price
Nicholas J. Price is a former Manager at Diligent. He has worked extensively in the governance space, particularly on the key governance technologies that can support leadership with the visibility, data and operating capabilities for more effective decision-making.