Board Portals: No Assembly Required

Portals are taking directors online and into the virtual boardroom

Get ready to start attending board meetings in pajamas. Using what have been dubbed "board portals," either created in-house or by outside providers, some directors are virtually moving the board process online.

With all of the necessary information in one central location, portals can cut down on travel, eliminate mailing and delivery hassles, increase communication among members, and make board materials easier to read. But like many technologies, the "always-on" aspect of electronic tools also makes it harder for directors to separate their board lives from their other jobs or "retirements." And the need to remember passwords and navigate complex security measures can add frustration to the process.

For corporate secretaries and general counsels who traditionally compile board books and other materials, portals make life a little easier. They not only reduce the time it takes to organize materials, they allow content to be uploaded and edited in a fraction of the time it would take to sort, staple, and mail. (Portals can reduce the cost of office supplies, too.)

A cottage industry of portal providers has cropped up in recent years to fill the need for virtual boardrooms. These providers not only supply software and/or websites for companies to move board meetings online, they also offer training to help directors adapt to the service. Most have staff on call around the clock, providing help for those directors who aren't as computer-savvy as they would like to be.

After a slow pace of implementation when portals first began to hit the market a few years ago, the rate of adoption for board technology is now growing steadily. A survey conducted last year found the percentage of companies using portals or websites for communications grew to 26 percent, from 12 percent in 2005, according to the Society of Corporate Secretaries and Governance Professionals.

James Long, vice chairman of Wackenhut Services, says board portals are a great way to avoid the abundance of paper materials that can weigh down directors at board meetings. "Directors like the idea that they don't have to lug hard copies to a meeting. Previously, they would have a laptop and six pounds of paper."

Not all board members are ready for the change. "I have been pushing for the conversion to electronic delivery," says James Pitts, who sits on the board of Wainwright Bank and is a member of the New England chapter of the National Association of Corporate Directors, which has been using Thomson BoardLink's portal for more than two years. "But I have witnessed situations where an occasional board member is not yet electronic-communications literate and resists." In those few instances, Pitts says, directors were able to get up to speed in very little time with the help of IT support and the director's administrative assistant.

Portal packages, which range in price from an average of $25,000 to $40,000, include on-site training, 24/7 support, and a bevy of security features.

Directors Desk by Nasdaq

Directors Desk, a portal company based in Spokane, Wash., launched its first version in 2004 and last summer was acquired by Nasdaq. It currently has some 75 clients; Nasdaq's own board went live with the portal in September. When choosing the layout for the portal, Adam Ross, Directors Desk associate vice president, says the company opted for a standard look, similar to that of other portals, that would be easy for any director to use.

A discussion thread is one feature offered by Directors Desk that other portals don't have, according to Ross, who says this feature has been popular among directors, as it allows customized groups to debate and discuss any number of topics inside the portal. What's more, Directors Desk employs a unique security feature. Aside from logging on with a username and password, directors must enter a personal-identification number (PIN) onto what looks like a telephone-dial pad. The numbers on the pad change position each time the user logs on, to prevent hackers using spyware from detecting the login pattern.

Other features offered by Directors Desk include profiles of directors and users that feature photos, affiliations, andother contact information. A calendar function allows directors to look at scheduled meetings for all committees, or just the ones they sit on. A hottopics feature displays daily news and gives directors a link to the full story. The portal also offers low-tech options for delivery of board materials, which makes it compatible with multiple technologies, such as faxing and email. This feature is especially useful for board members who aren't as comfortable with online options. "I can't tell you how many times I have heard how useful our fax notifications features are for directors," says Ross. "Boards do not necessarily need to go to an 'all-or-nothing' solution when deciding on a portal."

And while many portals tend to give the "administrator" role to corporate secretaries or general counsel, Directors Desk allows multiple administrators, called "masters," to upload content and facilitate votes, surveys, and discussions.

BoardBooks by Diligent

Diligent's Boardbooks officially rolled out to the board-portal market in 2001. Designed for ease-of-use and to ensure its clients are able to adhere to compliance and legal mandates down the road, Boardbooks currently serves more than 100 boards. Like most board portals, Boardbooks uses an Application Services Provider (ASP) model so there is no software, just a secure online website, and updates can be accessed from any computer. The portal has hosting centers from New Jersey to Toronto, and offices in New York, Australia, and the United Kingdom that provide customer support when a director is traveling.

Unlike other portals that tend to have a traditional website layout, Boardbooks strives to make the transition from paper to the flat screen almost seamless for clients. In keeping with the spirit of the traditional board book, the design for Boardbooks is just that—a virtual book. "It has to be intuitive and easy to use, and since we've all learned to read from paper books, everybody's comfortable," says Marc Daniels, COO of Diligent's board-member services. "Having a book-like interface really drives acceptance and ease-of-use."

Boardbooks also allows directors to download the entire portal as an encrypted database to a laptop so they can read while on the road. This allows the portal to be viewed without connecting to the Internet, but with the same security features as if they were connected.

To ensure security—an important factor for all vendors—Diligent offers the use of what are called RSA SecurID tokens, which are like virtual ATM cards. Tokens carry PIN codes that directors need to log on to their portals in addition to their usernames and passwords. The tokens aren't mandatory for directors to use, as they're tangible devices that could be lost as easily as a set of keys, but the feature provides an extra layer of security. "Everything is encrypted, so there's never a chance that anybody could be snooping on the lines, " Daniels says.

But clients reassured about security aspects may not be as comfortable about completely abolishing traditional hard copies. James Long says Wackenhut's board, which has used the Boardbooks portal for the past two years, continues to use paper as well. Other clients such as Mechanics Bank are on their way to going completely paperless, giving them environmentally friendly bragging rights.

BoardLink by Thomson

Thomson, a major provider of financial information, was a latecomer to the board-portals scene, launching BoardLink in January 2006. It has already attracted some 75 client boards and more than 2,000 end users. Like Boardbooks, BoardLink's security features include the use of RSA SecurID tokens, but unlike the Diligent portal, BoardLink has made the tokens a mandatory requirement.

BoardLink allows directors to access data from Thomson Financial, including reports, transcripts of conference calls, and other third-party information.

BoardLink also did its homework to inform the design and layout of its portal, which features calendars, news alerts, and a research center. The layout features tab navigation and sections for different committees, and a reference library for researching archival information.

With BoardLink, Thomson was aiming for secure, easy-to-use features. "We did a ton of research before we go into this, and we built a prototype based on that. Then we actually brought 30 directors into a research lab and let them play around with it,videotaped them, and let them complete the tasks," explains Greg Radner, senior vice president of corporate communications at Thomson.

What sets the portal apart from others, Radner says, is its security feature and service model. "We spent a lot of time getting [directors] trained and comfortable using the system," he says. "We make it easy to use, and that shows up in the results. Ninety percent log in every month."

"I would say 'ease-of-delivery' is the most obvious advantage," says Pitts of Wainwright, a Thomson Boardlink customer. "No printing, copying, no FedEx, and electronic delivery is totally secure."

Continues Pitts: "By far, the most precious commodity for directors is their time. Electronic delivery allows all the relevant information needed for routine decision-making to be delivered quickly, timely, and economically, in many cases freeing up time that can be used for having a dialogue on strategy and policy."


BoardVantage, which provides its portal service to about 160 customers— nearly half in the Fortune 500—has been around for five years. BoardVantage CEO Joe Ruck says he's worked with directors from both ends of the technology spectrum: some are more progressive, while others would rather only deal with email and nothing more in terms of electronic communication. "That's a reality in this business that you're going to have to deal with," he says. And that's why ease-of-use is such a high priority for BoardVantage. On the security side, BoardVantage offers its own twofactor identification. In addition to a personal password, directors use a private key encryption or answer a challenge question. Directors, as a result, can access the portal from any location.

For Bruce Crockett, director of ACE Limited, which has been using BoardVantage for about two years, the attraction was how quickly he became used to it. "I was able to get the hang of it in about 15 minutes on the phone," he says, stressing that no one actually had to help him in person. "I think it's sensational."

Crockett said he would enjoy seeing his board go paperless, and in using a portal, it may just happen. "The way the board flows, you don't even really need paper," he says. "The resolutions get handed out in hard copy, but in general, the presentation is flowed through [Microsoft] PowerPoint and slide decks. Save the trees."

Leaders4 Board Information Management by 80-20

More than 50 large companies are using 80-20's Leaders4 BIM portal. The provider has been a player in the software market since 1997, developing solutions designed to streamline governance, risk, and compliance management. Leaders4 creates a local and encrypted version of selected material that allows authorized directors and other executives to access material from the portal anywhere at any time.

Leaders4 offers two principal methodologies. The first is a licensed model, meaning that users purchase a perpetual license to the software, which includes training, installation, and support, but only runs on a particular company's data server. Second, there is the option of an ASP model, "which means that we will give you access to the software that runs on a server in a data center that we manage," says Nelson French, executive vice president of North American sales for 80-20. "So, nothing runs in your shop, everything is through your browser."

Some directors enjoy having both options. "It was the only option available that let us control our data and didn't put it in the hands and control of a third party," says Robert Flax, senior counsel for the California State Automobile Association (CSAA), which has been using Leaders4 since 2004. Flax says CSAA directors, while open to the idea of migrating to a portal, were varied in their opinions about completely abolishing hard-copy board books. "They all love the idea that [the portal] is there, but I would say there is a large spectrum of directors who say, 'That's nice, but send me the books anyway'."

The portal also offers several features, such as a "Reading Room" facility where users can monitor daily company and market activities. A governance and compliance framework facilitates effective communication of governance demands and visibility of compliance status—such as with sections 404 and 302 of Sarbanes-Oxley—at the board level.

Before adopting Leaders4, Flax says it would take nearlyfour months for him to manually collect and certify data, but having portal access has shortened the time for those tasks to just two weeks. "Basically, what we have is an electronic way of gathering information and having it reposed in one place where we can customize the data, " he notes.

Other Players in the Portal Game

While the board-portal market has been limited to a small number of providers, more vendors have begun to emerge. Some, such as BoardWorks, are targeting non-profit boards, as well as the boards of smaller or younger organization with price points to match. Meanwhile, other providers, such as BoardEffect, IntraLinks, and Info- Street, compete directly with BoardLink and BoardVantage. Endexx has gone a step further, offering solutions not just for corporate boards, but for more vertical markets such as school boards. Its portal allows school districts throughout the country to better adhere to state rules, and also help organize and report on school-related materials.

No matter what the industry or size of the company, board portals are offering efficient ways of facilitating the board process. As the potential market continues to expand with new solutions, functionality, and features, more boards are exploring how to best move their activities online.

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