New technologies are helping fund boards operate more efficiently and effectively. Simon Small (pictured), managing director for licensing in Europe at Diligent Boardbooks, explains why the fund industry is waking up to the transformative potential of cloud computing in the boardroom.
As a result of global events over the past two years, the importance of good governance is more firmly in the spotlight than ever before. Company boardrooms in every sector are now subject to ever more rigorous compliance directives and procedures, which mean more paperwork and more information to compile, process and digest. Nowhere is this change felt more acutely that in the financial services sector, and the fund industry is no exception.
The usual methods of organising and running board meetings are increasingly perceived as archaic in light of this new set of pressures, and new technologies have emerged that shine a light on workflow inefficiencies. Nevertheless, it’s remarkable how many fund boards still persist with the old-school approach to board meetings, especially given how critical they are to the smooth running and growth of their businesses.
The dated method will be well known to anyone who’s sat on a fund board. When board meetings are scheduled, company secretaries go into overdrive to collate and distribute often huge board packs for board members to review in advance. It is not uncommon for two board packs to be printed for each board member: one sent to their home, the other waiting for their arrival.
The fund industry faces a particular challenge with this traditional approach. Fund directors are amongst the most geographically disparate of any sector, and they travel frequently. Sending physically sizeable board papers across the world is therefore a logistical headache, with the potential to compromise the security of sensitive information.
Over years advising fund boards on how to operate more efficiently, I’ve heard horror stories about packs being left on doorsteps or in hotels, and of them never being picked up by the intended recipient – the stuff of nightmares when important data is concerned.
This critical issue aside, from a cost, environmental and efficiency perspective, printing hundreds of pages of board packs no longer makes sense. The cost in terms of man-hours to collate, order, organise and courier hefty board papers is very considerable. Environmentally, board packs are enormously wasteful of precious resources. Boardrooms across the world use entire forests simply to print their documentation.
These are clearly important considerations. But what’s more, the alternative – using new technological solutions – demonstrably makes board meetings more efficient.
Cloud-based board portals are enjoying rapid take-up in the funds industry because fund promoters and managers are realising that in an age of unprecedented scrutiny, cost-cutting and environmental awareness, board papers can be compiled and hosted online, securely in the cloud.
This innovation is revolutionising how boards operate. Instead of waiting to receive a 200-page tome a week before every board meeting – plus the inevitable amendment sheets and updates that follow – board packs can now be hosted securely online for members to comment on and see updated in real time.
At the flick of a finger, an iPad can now give board members access to securely stored board papers. Even the most ardent advocate of paper will appreciate searchable archives of their board papers.
Fund directors are often understandably tentative about moving to this new way of working, so many start using a board portal as a complement to traditional printed papers. However, the obvious benefits of the virtual option quickly results in it being adopted as the principal method of collating, distributing and reviewing board materials.
Fund boards that use faster, more effective, and more efficient cloud technologies are reaping the benefits – being faster, more effective and more efficient in the board operations.
When it comes to the fund industry, the cloud has a golden lining.
