Moving with the times

  • Date:01 Oct 2013
  • Type:Company Director Magazine
Matthew Sainsbury outlines the pros and cons of using some of the latest boardroom technologies.

Three years ago, when Steve Jobs launched the first model of the iPad, no one could have predicted that a device so clearly designed for consumers would be so in demand in company boardrooms.

Yet, that is precisely what has happened and now the bulk of the technology drive in the boardroom is focused on the iPad and the applications it enables.

Directors, once known for a conservative approach to technology, are now embracing the ability of iPads and other tablets to make their access to information more convenient.

“Companies have changed the layouts of their board papers now they’re using iPads. They’re now focusing on making the experience more interactive and modernising their approach for more effective communications,” says Priyam Chovhan, BoardWorks’ business development manager for software and services provider Computershare.

“Rather than carrying traditional board papers, which is cumbersome for directors, they are using technology to be more efficient by streamlining their access to information and, in turn, assisting the board to make more informed decisions.

“With directors more mobile and busier now than ever before, technology that translates both to their work and lifestyles can increase their overall productivity, giving them added advantage over their peers in the boardroom. Technology in the boardroom is fundamental now.” 

Features that are helping boards with their work include the ability to read and annotate their digital board packs offline.

This is more secure than having a hard copy travel with the director on the plane or to the hotel room, and still gives the director access to the documents while in transit and away from a stable internet connection.

Security – an ongoing balancing act
Security remains a chief concern about adopting technology in the boardroom, even though migrating the board packs to the digital environment is arguably more secure than carrying a hard copy around. With recent revelations from the US regarding the extent to which digital data is being “listened in” on, directors can reasonably be expected to continue to take a conservative approach to new technology for fear of legal ramifications.

Fabio Bastian GAICD, chief information officer at the Australian Institute of Company Directors, says there will forever be a balancing act between a director’s demand for technology and the need to maintain watertight security for very sensitive material.

“There are two trains of thought when it comes to boardroom applications; one is security and the other is usability,” says Bastian. “There’s a constant demand for easier-to-use tools, but that’s not necessarily complementary with the need for security. The more secure a piece of software is and the harder it can be to use, the less value it offers the board, so there’s a continual balancing act on that front.”

Simple security is not the only dilemma splitting boards between the need to adopt technology and the potential risks involved with adopting technology.

The ability of directors to use technology to access information in a timely manner is a significant advantage to a business in the event of a crisis. The nature of social media means a crisis can cause an organisation reputational damage far faster than before the advent of Facebook and Twitter, and technology can give directors the ability to react in a decisive manner.

But access to rapid information can backfire. “With electronic distribution and immediate two-way communication, it’s important an organisation chooses and uses the technology effectively to ensure everything is going through the correct approval channels so that you’re not distributing papers that haven’t been properly reviewed and vetted,” says Al Percival, managing director Australia and New Zealand of Diligent, the company behind the Boardbooks portal.

If an executive team pushes too much information to the directors in a draft or incomplete state, there is the potential for confusion and frustration.

Rather than being able to react decisively to urgent needs, the board will instead find itself having to constantly seek clarifications or potentially making confused decisions based on bad data.

“The reality is that the directors on the board are busy and while they are there to provide leadership, they don’t want to get 15 document versions and drafts over the span of a couple of days because that’s just going to be an irritation to them,” says Percival.

Despite these contrasting challenges, the basic ability for technology to allow a board to be more engaged and understand the business better is enough to provide a significant competitive advantage to those boards that do make technological investments.

Other technologies
In other areas, boards and directors also remain hesitant about technology innovation. One of the most popular technology trends in businesses looking to enable a more mobile and collaborative workforce is video conferencing.

With the technology now at a standard where it’s possible to set up video rooms where remote workers can network in for a full meeting experience, it would seem logical that boards adopt this technology to enable remote board meetings.
However, while phone conferencing and webcam communication can be used in times of emergency (such as an airport being shut down), there is a reluctance to adopt these as a standard way of running a board meeting.

“While there is value in the technology, it is essential to have proper board meetings where directors can see their peers face to face and be able to understand each other’s thinking processes,” observes Bastian. “There’s a tendency for technology to be pervasive in the boardroom, but it’s still very early days.”

Directors also need to continue to be careful when looking at the “latest and greatest” technologies. While the adoption of the iPhone and iPad have been successful at a board level, there is now the potential that other consumer technologies are assumed to be safe for board use and, in reality, they aren’t.

“Directors are adopting new technologies at a rapid rate. Most started out with email, free public cloud services like Dropbox and basic board portal systems. Now they see the value in a premium application, one that’s easy to use with superior searching and annotation tools,” says Colin Panagakis, business development manager at BoardPad. 

“From a risk perspective, I would be worried about any sensitive information on free services where there is a lack of appropriate encryption and identity protection.

“Any technology a board uses needs to be properly designed with regulation in mind and it’s only then that we can make the claim that the technology is more secure than carrying around a hard copy of the papers.

“It’s important that all the information is kept in a secure environment that can be managed by the company secretary and complies with good governance so that, should a device be lost, for instance, it can be ‘remote wiped’.”