Digital corporate governance: A step towards building forward-thinking organisations

It is no longer sufficient to merely move an organisation’s manual processes to a digital platform to achieve digitisation goals. With advances in technologies, companies can reap the benefits of intelligent systems to accelerate business performance and optimise intra-company communication to a highly efficient level. Companies that have not yet caught up with digital efficiencies will find that what they have to offer to both internal and external stakeholders, and customers (including board communications), will be subpar compared to their peers. Strategic planning in particular will be hindered without the pace of information flow meeting market demands.

Understanding how digitization enhances corporate governance

Moving away from the traditional methods of operations and organisational bureaucracy is fundamental to successfully building a digitally savvy, advanced company. Everything from banking to government services happens at the click of a button, often through a handheld device that is authenticated and synchronised with other critical services. Everywhere you move, the cloud follows.

Corporate governance is often defined based on the big P’s: process, people and performance. A good digital strategy and program will connect the three and help ensure a company’s leaders are in control their company’s direction.

At the crux of digital corporate governance is the ability to empower company boards with tools to make better strategic decisions. Some of these decisions could very well revolve around improving the company’s digital strategy. Good digital corporate governance doesn’t stop at enhancing the capabilities at the top level. It starts bottom-up, with an advanced strategy to revolutionise how people and processes operate and lay the foundation for a forward-thinking organisation.

Capabilities of digital corporate governance solutions

Corporate governance technologies enable organisations to move a large part of their manual and paper-based workflows to online processes. Board portals and e-meeting systems, which enable virtual meetings, are some of the ways to implement digital corporate governance. Use of integrated solutions provided by a single service provider at an enterprise level will ensure seamless data sharing, reduced security risks, and improved user experience. Digital corporate governance solutions come with the following core capabilities:

• Seamless transfer of manual, paper-based board meeting processes to a secure digital platform.
• Instant cloud-based access to board materials with granular file-level control.
• Virtual work groups for committee collaborations, commenting and discussion tools, and project boards.
• Geographical mobility, multi-device support, and real-time data-sharing abilities.
• Board pack creation, agenda building, attendance recorder, minutes publication, and action items management capabilities.
• Online proxy appointment and online voting.
• Virtual and hybrid meeting capabilities.
• Meeting management solutions to simplify the administration of large-scale meetings like AGMs.

Transforming business operations through digital corporate governance solutions

Savings in cost, effort, time and resources is certainly one of the primary administrative advantages of digital corporate governance solutions. However, at a higher level, they offer tangible and intangible advantages, including:

• Secured and improved collaboration. Digital tools offer geographic mobility, and board members can collaborate easily from wherever they are (including on the go) in special and general meetings. Features like virtual rooms, discussion boards and document sharing make it even easier.
• Enhanced information flow. With an integrated interface and data hosting portal, sensitive and relevant documentation can be instantly made available to all entities, with provision for commenting and discussions around the topic. There is also greater accountability for action items and ownership of tasks.
• Increased participation. Hybrid or virtual meetings enable a greater number of board members and shareholders to participate and actively contribute to strategic decision-making.
• Transparency. A centralised system makes decisions, actions and active discussions visible to all relevant entities and helps neutralise any internal powerplay dynamic. It further minimises financial risk.
• Managing conflicts of interest. Timely access to information can help board members assess if they have potential conflicts of interest and take appropriate actions in board meetings and shareholder meetings. Some systems also offer forms for board members to declare their conflicts of interest.
• Access to historical records for reference. Management and administrators can have easy access to previous meeting agendas, notes, voting information and annotations. Records also act as a ready safety net in the event of financial or regulatory audits.

Ensuring a framework for the smooth implementation of digital corporate governance

Digital corporate governance systems must be well thought out and enable you to achieve the crucial goals of corporate governance. A high-level implementation requires little room for error in terms of data security. Increasing governmental vigilance requires that you have an appointed team to ensure that your technical systems and corporate processes are compliant with regulations. Regular audits of technology partners and systems — as well as obtaining relevant accreditations — will go a long way in maintaining corporate security and minimising risk. However, not even the most secure system is risk-free. Companies should have an action plan in place in the event of a security breach.

Needless to say, any implementation would be ineffective if clear-cut processes and policies are not laid out for staff to adopt in the move towards improved digitization. Some staff may not feel comfortable moving from paper to digital processes. This this and other reasons, some companies may want to include training to ensure that all staff fully buys into the concept.

A last but critical element of ensuring success in corporate digital governance is maintaining the confidence of any company’s largest stakeholder – the client or consumer. Data breaches are common and therefore in addition to ensuring that systems are exceptionally secure, effort must be put in to reassure and demonstrate the same to external stakeholders.

This is a revised version of an article that was originally published on August 20, 2020.