The way in which boards of directors are conducting board procedures are changing, and it’s time to adapt. It is critical to note that Boards of Directors and Executives must understand that to succeed in today’s business environment, they must take a giant leap and embrace the digital transformation. Boards and executives are facing a myriad of challenges and can only successfully address them by leveraging artificial intelligence, data analytics, and digital communications.
Board Member Interaction in the Digital Age
Everything is changing – how board members interact with each other; how they make decisions; how they address issues from governance to corporate social responsibility; how they recruit and retain high-performance executive teams; and how they will communicate with both shareholders and stakeholders.
Making use of all opportunities of today’s digital technologies allows the board to take a giant leap into the digital world. To succeed in today’s environment, businesses require a deeper insight into customer behavior, a faster adaption to change and new business models for greater reach. Switching over from traditional board experience to a digital one will empower board members to conduct board matters in a more efficient way.
The Traditional Board Portal Puts Your Information at Risk
Nine years ago, a major financial institution faced a dilemma. A board member left a binder of sensitive information in a taxi in New York City. Following this security breach, the board quickly adopted a ‘board portal.’ That solution, nine years later, presents another problem. As hackers have become more sophisticated with more technology at their disposal, the same board realized that using older technology put their information at greater risk.
I recently spoke with more than 80 companies regarding their board proceedings. To my surprise, I found that half of them did not use any form of technology to conduct board matters. In doing so, board members expose the companies they serve/lead to unnecessary risks and are out of compliance. One financial institution noted, “it is like leaving our financial information and going forward strategies in thousands of taxi cabs driving down the internet highway. We realized that we must enter the digital age.”
Adapting to the Digital Transformation
To be competitive, the boards of today and the future must leverage artificial intelligence, data analytics, or data communications. The digital boardroom platform revolutionizes how boards of directors prepare for and manage board meetings to maximize board and executive performance. Consider the emPower platform. This platform includes prepopulated D&O questionnaire and board assessment, secure messaging, video conferencing, and leveraging artificial intelligence which provides automated transcripts of board or committee meetings.
The emPower platform can house all of your documents within it. All Board members can have access, annotate and store board documents in this single repository. It is not a hosted solution, it is a true cloud solution. At no time does that platform reside on anyone’s PC or Laptop – all of which can be hacked, stolen, lost, or broken.
This platform also uses data analytics to develop incentive plans to recruit and retain high-performing executive teams. The platform provides data around executive compensation and sorts through the more than 13,000 public companies in North America by job title and pay structure to create peer groups. The platform is a data analytics engine that allows your board to identify the right compensation and incentive program for its top executives; scorecard those plans and provides payout reporting at any time during the fiscal year. This concept is foreign to board portals.
The digital world has changed everything. Boards of Directors who resist the changes brought about by digital technology will fall behind their competitors. They will be ineffective. These boards will not be able to address the impact of the digital revolution and social media around shareholder activity and activism. These board will be less competitive in designing incentive plans to recruit and retain high-performing executive teams. And, they will be no match for hackers and others who wish to do their organizations harm. Everything will change. Everything has changed.
David Boim, Global Governance Advisors
Global Governance Advisors is a leading North American Human Capital Management firm that services boards of directors and senior management by providing transformational HCM governance advisory services and technology.