Pop quiz time! Which of the following do not belong together: board rooms, financial statements or iPads?
Actually, that was a trick question. The answer is “none.” If you guessed the iPad, Apple’s popular tablet device more commonly associated with applications such as Angry Birds and Words with Friends, you may not be familiar with the latest developments in board of director support services. In fact, many boards of directors are relying exclusively on online board portals to host directors’ board materials, which are accessed via iPads.
Benefits of Board Portals and iPads
Public companies are moving away from preparing board materials in paper format to hosting the materials online because of the cost savings, reduced impact on the environment and improved logistics, among other benefits.
Cost Savings: Traditionally, hard copies of board materials are assembled for each director and distributed via overnight mail. Even with preferred shipping rates and preparing the materials in-house, the long term costs associated with shipping and labor can quickly swallow the expense of a board portal and providing iPads to directors. Some corporate secretaries have even reported a cost savings within one to two board meetings where hard copies are not printed and distributed.
Reduced Impact: Many public companies already have initiated sustainability programs to reduce their impact on the environment. Utilizing this technology in lieu of printing hundreds of pages for a single meeting provides an obvious compliment to these ongoing efforts.
Improved Logistics: Increasingly, directors are reviewing and commenting on board materials in advance of board meetings. Board portals and iPads support these efforts in a unique manner: directors may receive updates to their board materials instantly rather than waiting for hard copies to be delivered via overnight mail, allowing them more time to complete their review in advance of the meeting.
Customization is Key
As more service providers enter the market, companies have more available options to create a customized tool for their directors. Before you proceed, however, consider carefully the following options:
Security: Given the sensitivity of a public company’s board materials, data security remains the most important consideration. Most service providers offer a remote “wiping” feature, which would allow the public company’s IT department to delete all data on a lost or stolen iPad. Additionally, the company may access the iPad’s GPS capabilities to locate a lost or stolen device (it also does a great job at giving directions to the next board meeting).
Annotations: Service providers also offer applications that allow directors to annotate certain board materials. This allows the director to read the materials and make notes in advance of the meeting. When considering this option, it is important to carefully consider whether the annotations might be discoverable in any subsequent legal actions. Due to these discovery issues, many companies have disabled the annotation feature, which is a practice that we recommend.
Selective Access: Many service providers offer users the ability to restrict access to certain documents to certain users (for example, when the compensation committee is reviewing documents relating to an inside director’s compensation).
24/7 Technical Assistance: Although directors may feel more comfortable routing questions to their own company’s IT department, most service providers offer 24/7 technical assistance.
From Drawing Board to Boardroom
Although each board will benefit from a tailored transition program, most companies that have successfully incorporated the technology into their board meetings first offered directors an option of receiving hard copies along with their iPad. Over the course of one to two meeting cycles, the directors became proficient with the technology and the hard copies were phased out. To ease the transition, companies typically provide each director with a training program matched to their familiarity with the iPad. Additionally, directors typically receive useful peripherals such as additional power cables, a protective case and a Bluetooth equipped keyboard and mouse. Of course, if after all this, some of your directors remain reticent to change, simply adding Angry Birds or Words with Friends may provide a suitable incentive.
The following board portal service providers’ websites contain additional information and, in some instances, online demonstrations.
Additional Articles from the Winter 2012 Public Company Forum:
Playing the Government Incentives Game
Shedding Light on Political Spending
Attorney-Client Privilege – A Public Company Gotcha
Dodd-Frank Act Progress Report: Winter 2012