A REPORTER called me the other day while I was off the network to ask about the SEC’s shareholder forums proposal. She wanted to know if I thought directors would participate in forums.
My immediate thought was that some will, but most won’t. Then I wondered if it would be OK to say something like, “Most directors are old fogies who can’t use computers,” but my partner Pam frowned when I ran that particular key message by her. (I’m in trouble when she reads this post.)
Now I see that BusinessWeek is quoting people saying basically the same thing, only in more polite terms. Corporate Boards Get Busy Online is about board portals, which are extranets used to distribute online board books, schedule meetings, and send secure messages. Here are few interesting tidbits:
Slow Adoption
“A lot of board members I know are the smartest people you’ll meet, but they are not technologically savvy,” says Joshua Greenbaum, principal of Enterprise Applications Consulting, a corporate technology consulting firm.
Noridian began using a board portal from BoardVantage in 2001 and has since issued laptops to each board member. But during a years-long transition period, the insurer used both the portal and paper board books. “Some directors have been looking at board books for 40 years of their lives,” says [a company rep].
More than three years after implementing board portal software from 80-20 Software, the California State Automobile Assn. is still sending out board books to its 15 directors.
Cheaper to buy than rent (more secure?)
Robert Flax, the assistant secretary for the California State Automobile Assn.’s board says he spent about $1,000 for each software license, a one-time outlay of about $30,000, plus an additional $20,000 to configure the software. He says setting up software internally is cheaper than using a hosted services provider for an annual fee. BoardVantage, for example, bases its subscriptions on the number of users and the features companies need. The entry level is typically about $25,000; for larger, multiboard customers it can go up to $100,000.
Not mentioned are the security issues around hosted services. Do you really want your board books and confidential information on a system that someone else owns and has full access to? Maybe I’m just being paranoid, but we are talking about information that could be worth a lot of money in the wrong hands.
Products and vendors mentioned
BoardVantage, Thomson’s BoardLink, Nasdaq’s Directors Desk, 80-20 Software, InfoStreet, Diligent Board Member Services, IntraLinks, ENDEXX, and Computershare World Records. Companies such as Chevron and Allstate have created homegrown Web portals.
Dominic (bio & disclosures) is IR Web Report‘s founder and an online investor relations consultant. He advises leading public companies and investor relations service providers worldwide on using the web for disclosure, engagement and profile building. You can contact him via the contacts page.
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