How do you create a more effective board?

The Role of Technology in Creating a More
Effective Board of Directors:
Using Board Portals Thoughtfully

Steven H. Shapiro
Pircher, Nichols & Meeks

Tom Racicot
Computershare Governance Services

November 28, 2012
December 12, 2012

Webinar Agenda

› Introduction

› Board Portal Overview

› Volume of Materials: What do directors really need?

› Delivering Concise and Timely Materials

› Questions & Comments

www.cgs.computershare.com

Steven H. Shapiro, profile

› In-house
› Deputy General Counsel - FMC Technologies, Inc.
› General Counsel and Corporate Secretary of:
› First Midwest Bancorp
› eLoyalty (now MatterSight) Corporation
› Cole Taylor Bank

› Private practice
› Pircher, Nichols & Meeks (currently)
› Before being in-house, 12 years of private practice in
Chicago


Tom Racicot, profile

› Global Head of Sales, Computershare Governance Services
› Responsible for full suite of governance products (entity
management, SEC filings and board governance portals)
› Governance engagements at hundreds of Fortune 500 &
FTSE 250 companies
› Managing teams in US, Canada, UK, Germany and Australia

› Director of Sales, Transcentive Corporation
› Helped architect one of the first global entity management
systems in World Records
› Early involvement with Sarbanes-Oxley interpretation and
implementations


Traditional Board Book Delivery

› Manual Indexing and Assembly of Board Books
› Locating Directors for Delivery
› Courier Delivery
› Unsecured Email Delivery of sensitive materials
› Stored on non-secured PCs if emailed
› Collection & Shredding after meetings


What is a Board Portal?

› Secure website (iPad) where directors and others can access board
materials and other sensitive documents. Expiry and purge options.
› “Green” solution that replaces the arduous and expensive process of
paper distribution
› Central location where one copy of the board book is uploaded to
the site, ensuring that everybody is literally on the same page
› Turnkey solution for the corporate secretary to simplify the assembly
process for board books
› Secure site designed for multiple layers of access, either by content
or by role (e.g., audit committee member)
› Secure means of communication that eliminates the need for
unsecure email communications among board members
› Alert mechanism that notifies executives of anything that requires
their attention


Board Portals & Tablets: They’re Here to Stay

No longer “cutting edge” or “revolutionary”
› iPad has changed everything
› 50% of companies: have a portal or will implement in 2012


The High Level Advantages

› Immediate communication:
› Follows retention policies

› Save money:
› Copying
› Shipping

› Save staff time and resources

› More portable: 1.3 lb iPad or 600 pages of paper?

› More secure: paper is not encrypted!


Efficiency & Security for Both Sides

Directors Administrators

Easy to access/iPad Simple assembly: drag & drop

All board materials in one place All board materials in one place

Immediate notifications Immediate notifications

Annotation capabilities Voting & surveys

Searching “Purging” & expiration

Calendar Collaboration

Elimination of paper Elimination of paper


Security is at the Heart of Portals

Security is at the heart of portals
› Risks of sending board materials by email

› Board books are encrypted (256-bit)

› What happens if a device is compromised?

› “Remote purging”

› Auto-deletion of board books

› Secure, in-system communication

› Board members tend to print what is sent to them


Put Board Portal Technology in Perspective

› Other similar technological developments:
› Word processing
› Overnight delivery
› Faxes
› Email

› These developments:
› Sped up process, but not without costs
› And of course, all subject to “GIGO” principle –
garbage in, garbage out
› Materials do not write themselves


To Evaluate Technology, Take a Step Back:
What Is Being Done?

› Board and committee meetings typically require hundreds or
even thousands of pages of materials
› Containing some of the most sensitive and significant
information about the company
› Providing for thoughtful board decisions by:
› Security of materials

› Timely delivered

› Of relevant information?


But…

› Are all of the hundreds of pages of materials generated for the
board necessary?
› Will board portals increase the amount of reading for
the board?
› Will an increase be more of a risk to obscure the most critical
information that directors need to see?
› Will the decision-making process be affected?


And…

› Do directors have enough time to digest all of the materials?
› Will using a board portal reduce the amount time for
directors to have to review materials?

› Want board members to have enough time to review this
volume of materials:
› A week?
› At least over a weekend?
› If possible?
› How and when do you notify?


What to Do About the Amount of Materials?

› How did we get to hundreds of pages?
› Regulatory requirements
› Historical reasons (always provided)
› Easier to let be
› CYA

› How and what to delete?
› Question each report
› On a rotating basis
› Board assessments – formal and informal
› Allow for more time
› More time-consuming to edit
› Sunset provisions and rotating evaluation
› “Tickler” system


What to Do About the Reduced Lead Time?

› Pick 1 person to have the authority to set (and keep) deadlines

› Allow time for work to be done
› Use board portal to post materials on current basis –
press releases, analysts’ reports, articles
› Why rush?


Ideal Solution –
Thoughtful Implementation of Board Portals

› Prepare and disseminate necessary materials

› Deliver them quickly and securely

› With a minimum of resources

› Highest security possible

› Board portals help with the last two points
› When used thoughtfully, board portals can significantly improve
board processes


Questions & Comments

What questions do you have?
Steven H. Shapiro
Pircher, Nichols & Meeks
sshapiro@pircher.com
00 1 312 915 3175

Tom Racicot
Computershare Governance Services
tom.racicot@computershare.com
00 1 203 435 2950
Register for a Free BoardWorks Webinar
http://cgs.computershare.com

How do you create a more effective board?

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