Why Board Portal Software is Among the Hottest Things In Business

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Five years ago, the thought of company board members turning to a screen instead of briefing books was so novel that the phrase board portal was contained by quotes in an American Banking Association newsletter. Three years ago, only 9 percent of directors reported using online portal to access information or communicate with their fellow board members.  Today, fully half of board members do, according to a new survey issued by KPMG’s Audit Committee Institute.

The survey, which was published in June, detailed that online board management is rapidly growing and will likely continue, with another 20 percent of respondents planning to introduce a portal to their boards in the next year. They are mostly used to post pre-meeting materials and update the board between meetings.

Such a rapid rate of adoption should not be too surprising. Board portals provide a clear advantage over paper reports. Moreover, many board members began demanding better access to corporate information and financials following the 2002 passage of the Sarbanes-Oxley Act, which holds boards responsible for internal controls and audits of their companies.

Security Worries Linger

But even when companies adopt board portals, KPMG still notes some concerns. The most common worry is security. More than 75 percent of the survey’s respondents say they are concerned about the security of a board portal. And the burgeoning demand for board portal software has spawned dozens of businesses in recent years -- more than 100 companies are listed under portal software on software comparison site Capterra – might include a few unscrupulous or disorganized ones that could compromise boardroom confidentiality.  

Still, the KPMG survey indicates that these privacy concerns are not so worrisome that companies are turning from board portals. And they are continuing to evolve, from secure websites to mobile aps. Nearly 20 percent of survey respondents say they provide a tablet, such as an iPad to its board members to access the portal. That number is expected to double in the next year.

Redefining Boards or Just Making Life Easier?

This increased connectivity could eventually change the role or influence of boards on companies. While board portals are obviously more convenient, they also offer directors an opportunity to be more engaged in committees and have greater communication among themselves and management. This raises question: Will Board Portals change the nature of Boards themselves?

Click here to read the entire KPMG Audit Committee Institute report.