Security and simplicity are key challenges to implementation.
Even as information security continues to be a significant concern, the use of online portals for hosting board materials and other company information is growing. Just two years ago, only 9 percent of directors we surveyed said they used an online portal. Last year that number jumped to 35 percent – and today it’s at 50 percent, and climbing.
It’s clear that technology is moving rapidly into boardrooms, helping to improve the board’s efficiency, directors’ connectivity to timely company and board information, and more. What isn’t so clear, however, is how board portals and IT devices are being used, and how effectively directors are adapting to entirely new ways of accessing their information.
Results from our May 2011 survey of 358 general counsel, corporate secretaries, senior management and directors, conducted jointly by KPMG’s Audit Committee Institute and Corporate Secretary, offer a timely snapshot of the movement toward board portals, including how common they are, how they’re being used, how often they’re updated, and concerns about security. These findings may be instructive for companies and boards that are considering using – or are currently adapting to – these new technologies in the boardroom.
Key survey findings
•  One out of two companies we polled uses a board portal. Half of our survey respondents said their companies currently use a board portal, and 20 percent expect to in the next six to 12 months. Eighteen percent provide board members with a tablet device such as an iPad to access the portal, and 20 percent plan to do so in the year ahead.
•   Portal security is a significant concern. More than 75 percent of respondents expressed some degree of concern about portal security, with 38 percent being ‘very concerned’. Some 32 percent reported that certain ‘sensitive’ information is not posted to the portal, while 68 percent said their companies post all pertinent board information.
•   Posting pre-meeting board materials and updating the board between meetings are the two most common uses for portals. Companies are also using their portals to provide updates on the activities of board committees (41 percent); enable real-time communications and collaboration between board members (17 percent); and facilitate information, communications and Q&A between directors and management (11 percent). Portals are also being used to support board self-evaluations and surveys (including consent agenda items), and as a repository for board minutes, company information and more.
•   Most companies update their portal on a real-time basis. Some 70 percent said their portal is updated ‘real-time, as needed’. The remaining 30 percent said they update their portal monthly, quarterly or weekly.
•   Portals are improving board efficiency, but many directors have difficulty adapting to the technology. More than half of respondents (55 percent) said the portals have improved their board’s efficiency (though 40 percent were ‘not sure’), and while 36 percent said the board has ‘adapted easily’ to portal technology, 64 percent said that some or most board members have had difficulty adapting.
Our survey findings suggest that the majority of companies and boards are still finding their way with board portals and supporting technologies, but trends, best practices and lessons are emerging. As one executive said in a recent article on technology in the boardroom, his board chairman was ‘enthusiastic about moving the board materials online, provided that any new system would be simple to use and, above all, would keep confidential documents secure’ (see ‘Leading a Board at the Speed of Instant’, The Corporate Board, March/April 2011).
‘Simplicity and security’ is a great baseline to shoot for, but moving to a board portal – and making the most of it – also requires collaboration and adaptation on the part of directors, management and the IT team or vendor supporting the technology. Equally important is monitoring how the portal is being used – do directors find it easy and intuitive to navigate? Would different features boost its use and value? Are updates frequent enough? – and, of course, making adjustments along the way.
Tips for successful implementation of an electronic board portal
Gina Merritt-Epps, corporate counsel and secretary of energy services holding company South Jersey Industries, outlined the best way to establish a board portal in a presentation to governance professionals earlier this year. The following is excerpted from that presentation.
1.   Corporate secretary lays out the plan. First the corporate secretary should identify the costs and benefits – security issues, time and cost efficiency, and so on – to justify the conversion to the electronic board portal. Then they should set a deadline for a full conversion to the new system to mentally prepare the users.
2.   Chairman announces the decision. The chairman should announce the employment of the portal and address concerns from directors. Common concerns may involve the provision of supporting technology, both hardware and software, for the new system.
3.   Involve the key directors. To allow key directors to become more receptive towards the new system, the chairman should engage them in the selection of a suitable web portal provider.
4.  Select a dedicated IT person. The company should consider hiring knowledgeable, full-time IT personnel to assist all users with any queries on the use of the new technology.
5.  Provide all necessary technology. Supporting hardware like laptops, printers and AirCards should be provided by the company. Clear instructions should also be given to help new users utilize the technology efficiently.
6.   Communicate thought through the web portal. To counter temptation to revert back to former means of communication, accustom users to the portal by sending out all information via the portal.
7.   Incorporate news articles and press releases. Disseminate general information and news feeds through the portal so that users will find more value in the new system.
8.   Get a computer-savvy assistant. The administrative assistant should be educated in and comfortable with the use and troubleshooting of the portal.
9.   Look before you publish. Validate the content to be published before loading it onto the portal. Some fundamental concerns may include font size and type, and orientation and formatting of the document.
Other important tips for success:
•   Choose a portal layout which resembles the original hard copy
•   Ensure that information from the portal is printable
•   Utilize the portal for other functions such as storing contact information and noting minutes
•   Introduce the idea of an online voting system using the portal in lieu of email, phone conferences and polling
•   Manage and customize the degree of confidentiality for each document circulated on the portal.
