Digitizing the Boardroom
Digitalization has revolutionized how organizations operate across all levels, even in the boardroom. Because of this, it has become a hot topic in board meetings all over the world. When boards discuss digitalization or digital transformation, the focus is usually on its impact to their organization as a whole. There is a need, however, to zoom in on how digital transformation will affect the boardroom itself.
Clearly, digitalization has changed the role of the board and can transform the boardroom.
In this article we unpack the topic of going digital in the boardroom. Here’s a summary of some important points discussed in the webinar.
Why Should Boardrooms Go Digital?
The COVID-19 pandemic along with rapidly-changing market dynamics has undoubtedly pushed boards to accelerate and elevate their digitization initiatives. Raymond Lam, CEO of Drewcorp Services in Singapore, said that “In these unprecedented times, a lot of board meetings would not be possible without having some kind of a digital solution.”
The shift towards a digital boardroom is emblematic of the entire world’s transition into becoming an increasingly digital world. Directors can now easily join board meetings by digitally accessing documents and joining through a video conference using solutions like a board portal software that enables seamless participation and real-time collaboration.
Thereby, going digital in the boardroom opens up an opportunity for boards to improve governance and increase relevance. Sharing critical information and enabling virtual participation has expedited the decision-making process. There is a larger sense of transparency and accountability for directors when they go digital. Matching the fast pace in which most organizations operate, digitalization allows boards to respond in the most efficient and effective way possible.
In the midst of uncertain times such as a global pandemic, digitalization has become particularly important for boards. They need to continue providing much-needed guidance and leadership to their organization by operating as a digital boardroom.
What Challenges Boards Face with Technology?
Getting the board familiar with the technology may be an obstacle for some organizations. Our panelists shared personal experiences in which their colleagues trained on how to use not just the application, but the device itself. They emphasize that training the board members to become a digital board must be comprehensive and teachings suited to the right audience.
When boards go digital, the involvement of board directors in operations increases. Directors have more access to information and must make decisions much quicker. With this, there is also a risk of dumping too much information for boards, so sharing just enough information for the board to make decisions without overwhelming them is critical. Waweru Mathenge, Chairman of the Institute of Corporate Secretaries in Kenya, posits that “digitization changes the board’s role from just pure oversight to being more involved.”
What are the Legal and Compliance Aspects When Having a Digital Boardroom?
Different countries have different regulations about virtual board meetings. In Singapore, Kenya, and India, there have been amendments to regulations surrounding virtual board meetings as a response to the COVID-19 pandemic. These and other countries in the world are to have these amendments that are a signal to more permanent and comprehensive regulations regarding virtual board meetings and the wider acceptance of having digital boardrooms.
Digitalizing the boardroom enables global companies to empower transnational governance.
Because corporate secretaries are usually in charge of ensuring compliance, they need to constantly be aware of the regulations concerning virtual meetings and having a fully digital boardroom. This runs true for both virtual board meetings and virtual annual general meetings. To successfully empower digital transformation, encouraging productive participation by the digitalize board must also be a priority of corporate secretaries.
How Digitalization Helps in Mitigating Risks and Promoting Regulatory Compliance?
As digitalization becomes more prevalent, cybersecurity becomes a big concern as well. Choosing the right digital tools that have proven to be trustworthy with keeping information secure should be considered. Having the choice regarding how and where sensitive boardroom data is hosted can give boards peace of mind, as well.
With information being immediately available, the risk of it falling into the wrong hands has also increased. Controlling and tracking who sees certain documents or does certain actions allows corporate secretaries to uphold the integrity of boardroom operations. Strategizing on a board level includes considering the risks especially when transforming into a digital boardroom.
The Digital Boardroom and Corporate Governance
When coming up with their digitalization strategy, boards aim to stay ahead. They need to do so while answering the ever-important question — how can we leverage digitalization to achieve better board governance?
Having a digital boardroom enables directors to be able to work more efficiently, thereby improving decision-making and corporate governance. Digitalization should always aim towards improving current processes and workflows of individuals.
Summing it all up, going digital in the boardroom challenges boards to rethink how they can improve how they lead amid the rise of new technologies. Digitalization unlocks endless possibilities for boards to transform their operational processes, management style, and governance for the better. In the end, a more digital boardroom should help the organization achieve a more efficient and better board governance that will bring positive effects.