Tablets and Portals Prove a Hit in Boardrooms

By Pamela Babcock December 21, 2012

A growing number of directors and boards are pushing stacks of paper aside and using iPads, tablets and online portals to manage meetings and share confidential board documents among directors and executives.

There are benefits and risks to using these mobile devices in the boardroom. While technology can improve efficiency and connect board members and executives to timely information, security and ease of use can be challenges, experts said recently.

The key is to “look at the sources of risk and to eliminate them systematically,” said Joe Ruck, president and CEO of BoardVantage in Menlo Park, Calif., during a December 2012 webinar presented by corporate governance journal Directors & Boards.

BoardVantage develops online portals, which provide a secure, online space for groups to access information, share experiences and collaborate.

Mark Rogers, CEO and founder of BoardProspects, a Boston-based online board recruitment community, said he thinks the paperless movement is “a great thing,” particularly since people typically serve on multiple boards.

“The ability to have all of your board-related documents—your bylaws, votes and things like minutes—in a searchable format at the touch of your finger is invaluable,” Rogers said. “I think it is going to make a dramatic improvement in corporate governance.”

Security Still Big Concern

The use of online board portals is growing, but security is “a significant concern,” according to a May 2011 survey by the KPMG Audit Committee Institute and Corporate Secretary.

Nearly half (50 percent) of boards used an online portal, up from 35 percent in 2010 and 9 percent in 2009, according to the survey. The survey included responses from 358 general counsels, corporate secretaries and directors. Other findings include:

  • While 50 percent of companies use a board portal, another 20 percent expected to in the next six to 12 months. Eighteen percent said they provide board members a tablet, such as an iPad, while an additional 20 percent said they planned to do so in the coming year.
  • More than 75 percent expressed “some concern,” while 38 percent reported they were “very concerned” about security and 32 percent said they don’t post certain sensitive information to the portal.
  • Most companies—about 70 percent—do real-time updates, while the remainder updates the portal monthly, quarterly or weekly.
  • More than half (55 percent) said portals have improved board efficiency.
  • While 36 percent said their board has adapted easily to portal technology, 64 percent said, “some or most board members have had difficulty adapting.”

Tablets linked to portals can raise control and security issues relating to discoverability, loss of data or loss of the iPad/tablet itself.

John D. Martin, a partner of Nelson Mullins Riley & Scarborough in Columbia, S.C., who leads the law firm’s electronic discovery (e-discovery) and information management practice group, worked recently with a pharmaceutical company and health insurer that have migrated to electronic board books.

Martin said so-called board “e-books” can be “a blessing and a curse. While there’s definitely a practical advantage to being able to electronically communicate,” Martin said he counsels clients to not create “individual e-discovery targets out of various devices” board members might be using.

“We want to make sure that as we centralize the information, that it can be accessed from a central point,” Martin said, adding that e-board books should be designed so that “there’s nothing unique on a device that’s not on a centralized server.”

For example, if a board member annotates a document on the electronic board book, Martin said, “we prefer it to be accessible in a central point, for legal purposes.”

Companies also should make sure devices are password protected, data are encrypted, and that the device can be “remotely wiped” if lost, Martin added.

They need to be mindful of legal and regulatory requirements for public disclosure, also, and be able to answer the following, Martin said: “If you’re an organization subject to a Freedom of Information Act (FOIA) request, how are you going to respond to a FOIA request for all your board meeting materials when it’s all on an iPad?”

Collaboration, Ease Keys to Success

Making the most of a board portal requires collaboration and adaptation by directors, management and the IT team/vendor, the KPMG study stated. Portals should be easy to navigate, include features that boost its use and value, and provide frequent updates, according to the study.

The board of the University of Illinois Employees Credit Union (UIECU) in Champaign has been using iPads for board matters since 2009.

“It makes a lot of sense,” said Scott Pickard, director and secretary of the nine-member board, which meets monthly with a packet that’s often more than 100 pages.

“All that paper shuffling just got to be a lot,” Pickard said.

UIECU, which has nearly $280 million in assets and more than 42,000 members, can credit staff with suggesting that the board embrace the new technology.

“They’re all early adopters of everything,” said Pickard, who is also associate director of the Information Trust Institute. It helped that most board members were “fairly Internet savvy.” Credit union staff provided iPads to all board members.

The board meets on Tuesdays and credit union staff typically posts the board packet using the file-hosting service Dropbox, on the previous Thursday.

“What’s great about it is we have links to the Web and video, if it’s appropriate,” Pickard said.

Southern Pine Electric Power Association, in Taylorsville, Miss., made the switch to a paperless boardroom using BoardVantage in March 2012 after five months of extensive research into various options, according to Jan Collins, executive assistant for the Southern Pine board.

The company set a schedule for training and visited several other electric co-ops to find out “what had worked and had not worked for them,” Collins said. The co-op’s IT department set guidelines and requirements and assisted with the launch.

In advance, Southern Pine provided iPads to its 12 directors, attorney, and managers, so everyone could become familiar with them.

“We wanted them to use the iPad for everything,” Collins said. The co-op even downloaded free apps for individual directors based on their interests, such as hunting or the stock market.

“The key for us was one-on-one training,” Collins said. “We made it as user-friendly as we could.”

Pamela Babcock is a freelance writer based in the New York City area.

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