Board management software - The future of boards

Introduction

With the current global economic climate, Boards today must be equipped with the skills necessary to facilitate adaptable, solution-focused problem-solving on all levels of their company. This new focus includes regulatory challenges, empowered customers and shareholders as well as technological advancements. 

It can be challenging for directors to keep up with the vast changes sweeping across the industry and economy. The role of the Board is fundamentally different today from 10 years ago, with Board members increasingly asked to perform new functions within organisations. Many companies struggle to adapt to these changes and risk falling behind the trends of their professional field. On top of fulfilling all their required duties, Boards these days need to also be adaptable and highly focused on timely responses to pressing issues – finding a balance between short and long-term projects. 

If your company is struggling to understand the new role of its Board, read on. 

Our team at BoardPro will walk you through nine factors shaping the present and future of Boards, and the support available to help members fulfil their new responsibilities. We have also spoken with key experts in the industry to gain insight into the situation on the ground in the Boardroom so that you can better understand the state of the industry and the future direction of your organisation.

1. Stakeholder Governance

Stakeholder governance is fast replacing shareholder governance as it presents a more comprehensive model, offering a business scope that considers the interests of profits, people and the planet in its decisions.

Modern governance is progressing, as it always has and as it always will," says Lisa Cook, founder and managing director of Get On Board Australia. 

"I think what we're seeing is redefining what it means to 'govern in the best interest of the organisation as a whole to ensure the continued success of the organisation.' Indeed, there are some commentators who believe that the director's duty of Care and Diligence (s180 Australian Corporations Act) and the duty to act in good faith and in the best interests of the company (s131 New Zealand Companies Act) can be interpreted to mean that decisions regarding environmental and social impacts to the business – those things that threaten the reputation of the organisation and/or its future supply chain or operations – must be taken into consideration when determining whether directors acted in accordance with their legal duties.

Smart boards are not seeing this contemporary way of governing as "Shareholder governance" vs. "Stakeholder governance," with only one way being THE right way to govern. But rather, they are seeing the opportunities present in taking a "yes and" approach. We live in a day and age where both shareholder returns AND stakeholder returns or benefits (or at a minimum, not a degradation) can be pursued and achieved. It is becoming an expectation from investors, consumers, and regulators, so boards are at risk if they don't evolve their governance and their way of doing things in the business to meet both outcomes.

It's critical for each Board to understand both shareholder and stakeholder governance and how it impacts how they currently govern and lead. The best boards will evolve their internal governance infrastructure to meet the current and future needs of investors, customers, and their broader operating ecosystem. They must have their finger on the pulse of what matters (to shareholders, customers, and other critical stakeholders) and use company resources (including shareholder funds) to invest in meaningful and valuable ways of doing business. Savvy boards will find or create the opportunities that this governance evolution is providing all boards and organisations. Don't be left behind."

2. Remote Boards

The shift to remote and hybrid working environments means that people who in the past did not have access to Boards can now participate in Boardroom and its culture. 

Board members no longer need to be physically present in the office of their Board to contribute meaningfully to Board discussions and decision-making activities. Companies are using virtual Board meetings to adapt to staff locations and schedules, meaning they can unite the most qualified candidates in one (virtual) room to best serve their company's goals.

3. Increased Diversity

Board diversity is increasing, with more opportunities and emphasis placed upon the importance of making space for women, people of colour and LGBTQ+ individuals. Diverse Boards offer the best insight for their companies, contributing to sustainable growth for the organisation as they harness a variety of perspectives on the business. This trend will see Boards become more global, including a wider range of skillsets and backgrounds.

Lloyd Mander, founder and principal consultant of the Diversity of Thought Scorecard, shared his thoughts with us on Boardroom diversity. In particular, he discussed how an increase in diversity within a Board does not necessarily translate into inclusivity and how Boards can work to foster both values in the workplace.

For Boards to improve diversity, I would encourage them to keep two points in mind," shares Mander. 

"Firstly, it's important to consider diversity as a multidimensional concept (diversity is itself diverse!). This means that in addition to gender, ethnicity and LGBTQI+, it also includes elements related to experiences such as socioeconomic background, cognitive diversity and many more. Of course, considering multiple dimensions at once will likely be overwhelming for Boards. Therefore, I would advise a focus on the dimensions that are particularly relevant to the organisation's strategy, for example - an educational charity that is supporting youth from disadvantaged backgrounds would prioritise the recruitment of board members who have come from lower socioeconomic communities. 

Secondly, diversity is by definition, context-specific. For someone to be diverse in one or more dimensions, the point or points of comparison matter. e.g. an all-female board does not have much diversity in gender but it may well have diversity across other dimensions.

Beyond bringing insights and network connections, board members who bring diversity across one or more observable dimensions can also inspire others who share these factors to see a board role as a potential pathway for them. It's often said that: "You can only be what you can see." This creates an opportunity to access a much wider talent pool.

For inclusivity to be effective, I recommend considering both preparing an incoming diverse board member for the role and also ensuring that the existing Board is ready to wholeheartedly welcome their contribution.

The organisation should plan and undertake a thorough induction for an incoming person (as they should for any new board member). This would include advance access to previous minutes, current board policies and strategy documents. One-on-one meetings should be organised with key members of the management team and at least some board members including the chair. If the incoming board member is less experienced, an established board member may be designated as their 'sponsor' or 'buddy' to give them a supportive point of contact for any questions and to streamline their integration into the Board group.

For the existing Board, if their selection of diverse board members has been internally motivated based on the specific needs of the organisation, as opposed to a 'tick box' exercise simply to appease stakeholders, then they are far more likely to support an inclusive environment. The Board will be in a better position if they themselves have undertaken some prior education relating to the diverse dimensions of the incoming board member, so they are more ready to ‘meet them where they are’.

As will all new board members, an incoming diverse board member brings the special skill of ‘fresh eyes’ to the current status, challenges, and opportunities faced by the Board. The Board should absolutely take advantage of this by actively involving them in their decision-making process right from the start, as opposed to expecting them to sit back and observe from the sidelines. Ensuring that new board members are genuinely involved in the Board decision-making process from day one, combined with a sound rationale for their appointment, goes a long way to making them feel like they belong and are not there for some tokenistic reason.

Finally, inclusivity is greatly supported when a board has a strong culture of psychological safety. Where all board members are able to be who they are and share what they think.”

4. Varied Expertise

Creating Boards made up of members with diverse expertise strengthens the company and helps with managing new responsibilities. 

Experts in areas such as technology, climate change, ESG and risk management can offer the key insight that Boards need to successfully steer their businesses. Boards can likewise consult with experts outside of their organisation in order to expand their collaborative network and make evidence-based decisions.

5. Director Turnover

Increased change and a variety of issues facing Boards mean shorter tenures for Board members. Boards are introducing shortened terms across the Board in order to increase diversity and ensure that their Board benefit from fresh ideas. Many Board members from younger generations are hesitant to commit to six to 10 years on a Board post, so this new model suits their professional goals as well. This change in structure means it is more important than ever for Boards to have comprehensive succession plans in place.

Simon Telfer, founder of Appoint Better Boards and SpringBoard, spoke to us about the elements that go into creating a comprehensive Board succession plan.

He shares that "maintaining a skills matrix that objectively measures individual director competencies against those required for an effective board" is key.

"Ensure there is a pipeline of potential chair talent on the Board – hiring a chair directly onto the Board is not ideal. Consider creating the role of a deputy chair who will be earmarked for succeeding in the chair role when they leave.

Ensuring that term completion dates are staggered [is a good idea] – you don't want multiple directors to finish their terms all at the same time, if possible. Asking directors to signal intentions well in advance of any decisions to retire or to leave the Board [can also help]."

6. Greater Agility

The pandemic taught Boards the importance of adaptability. Boards had to rapidly adapt to remote communication and a subsequent increased rate of communication due to immediate access anywhere in the world. 

This shift highlighted the importance of Boards being able to think on their feet and adapt to change in a way that supports and benefits their employees.

7. Environment, Social and Governance (ESG) Issues

External pressure from everyone from investors to customers has increased the Board focus on ESG issues. 

This is related to the shift to stakeholder governance with a comprehensive conception of success that is not based solely on maximising shareholder value. Companies are increasingly emphasising transparency in the workplace and focusing on environmental and diversity concerns. Overall, Boards are operating with an increased awareness of their accountability to their stakeholders.

8. Technology Disruption

Transformative technology – such as portal software – is creating new opportunities in the Boardroom. The repercussions of new technologies are being felt all along the supply chain, with companies capitalising on new technologies to increase efficiency and productivity. 

Board management software is one tool that offers increased engagement and adaptability in the workplace, allowing members to join meetings remotely and collaborate in real-time, regardless of geographic location. It also offers increased security to combat the recent spike in cybercrime.

9. Increased Security

Cybercrime is running rampant as companies move even more online, and the need for increased security measures in the workplace is paramount. Boards should be aware of security threats coming from both within and outside the Board itself, be that outside hackers or careless internal employees. Board portal software automatically stores sensitive documents in a central, secure location with additional security measures, meaning that company information is kept safe through secure central housing and controlled access.

Board members used to mainly be focused on guiding their company. In today's shifting Boardroom environment, Boards are being called upon to play an active role in shaping the future of their companies and providing strategic decision-making. In addition to their traditional role, Board members must step up to meet the shifting challenges of the modern Board world.

Boards can remain on the cutting edge of this shift across the industry by making use of the tools available to support them in creating strategies and promoting transparent workplace practices. Board management software can help Boards maintain momentum towards their goals, eliminating administrative distractions so they can focus on the key issues of the future, such as diversity, stakeholder governance and security.

What is BoardPro?

BoardPro offers Board portal software to suit your organisation's particular needs. With a focus on customer-first technology and company satisfaction, BoardPro offers reliable support and user-friendly interfaces that help your team easily incorporate their new portal software into their Board routines. Emphasising security and collaborative ease between team members, BoardPro's Board management software helps you streamline your process, eliminate administrative timesinks and achieve your Boardroom goals.

Schedule a demo with our team today and begin to experience a whole new way of meeting.