For many organizations and companies, board meetings are an integral part of doing business.
They are a necessary tool and system for the smooth running of businesses. In many cases, these meetings can be dull, stretched out, or end up not meeting their goals or achieving anything.
Board meetings must be planned meticulously. This planning should begin long before the scheduled date of the meeting. Ideally, the planning for the next board meeting should begin as the previous one ends. Board meetings are crucial to the successful running of a company or organization. A sound system for planning and executing board meetings is necessary.
The importance of well-planned board meetings:
A good board meeting has many vital components. These include:
- Discharge of duties to directors
Duties are discharged to directors during these meetings. These duties will then be passed down to the hierarchy of the company. A well-planned meeting details these duties comprehensively. This then translates to efficient work from well-informed employees.
- Decision making and problem-solving
Board meetings are an efficient method of decision-making. When big company decisions need to be made an organized forum is the ideal location. Board meetings allow for a conducive environment for company problems that can be discussed and brainstormed. Regular and efficient meetings mean an increase in company productivity and profitability.
- Minutes of the meeting
The minutes produced at board meetings are also beneficial. These serve as a record of decisions agreed on and changes made. Well-written and detailed minutes are the evidence that a board meeting occurred. The quality of the minutes also highlights the quality of the meeting itself.
- Debriefing of directors
Board meetings can serve as debriefings. This way, every director is aware of the dealings of the other. This helps in company harmony and overall growth. Different departments should work in unison. A board meeting is an excellent place to detail each department of a company’s progress and dealings.
- Review and future planning:
A company can look back on its past progress for analysis during a board meeting. This can be either annually, quarterly, or at any other benchmark. Plans for future endeavors can be made by carrying out conscious and cohesive reviews of past endeavors.
The preparation for a board meeting goes past selecting a time and place. Meeting preparation involves creating an agenda and setting the tone for the meeting in advance. Here are some valuable tips for meeting preparation:
- Conclude the tasks of the previous meeting
All tasks assigned in the previous meeting should be accounted for before the next one is planned. This signifies that progress was made between meetings. The previous meeting’s efficiency can be evaluated this way. It should be seen as a sign to change methods in the upcoming board meeting if previously assigned tasks are still undone.
The best way to review the previous meeting is to look at the minutes, including a detailed rundown of the topics discussed in the meeting and the tasks assigned. Abandoned or incomplete tasks can be concluded before the next meeting, which prevents the company from moving backward or lingering unnecessarily on specific subjects.
- Preparation of the meeting agenda
This is one of the most necessary and apparent steps that go into meeting preparation. The meeting agenda is the tool that every board member will use to prepare for the meeting. To an extent, the agenda defines the tone and overall outcome of the meeting.
A strong agenda is necessary for an efficient meeting. Board members should receive the agenda ahead of the meeting. This will give board members ample time to prepare for the meeting. A robust agenda should be open to feedback before the meeting day.
Board document and material distribution
- Board documents include the agenda, governing documents, financial reports, calendar, and any necessary correspondence.
- Governing documents are the files that state the principles and standards of the company. They are helpful for referral when in need of guidance or clarification.
- Financial reports are necessary to keep track of the cash flow of the company. This information allows the board to make informed decisions.
- The annual calendar of events is a calendar showing the engagements planned.
- Important correspondences include emails and letters, which may be relevant to address specific problems or decisions during the meeting.
- The board documents and materials distributed should also have a ‘reference’ section. Any other information that may not be addressed during the meeting but remains relevant is included in this.
The Meeting Day
The board meeting itself should run smoothly if proper preparatory steps are taken. A board meeting can be very hectic, despite meticulous planning. These tips should help alleviate some of the stress:
- A timed agenda
Once again, the agenda plays a pivotal role in the course of the meeting. Mainly, the meeting chair should receive a precisely timed agenda. The agenda allocates specific amounts of time to certain topics and sections of the meeting. A board meeting will often run out of time before touching on all the topics it set out to, which is a widespread occurrence.
A detailed agenda ensures that there is maximum time optimization. If more time is needed, it can be extended over a section or topic
- Executive sessions
Independent directors can meet before the full board meeting with management staff commences. This executive session allows for a quick debriefing before the meeting. It gives the directors an idea of what to expect in the meeting. Directors establish some level of agreement and unison through a brief executive session before the meeting.
Sometimes, a meeting between the directors and the CEO may occur before the board meeting to hammer out details of the agenda. It is still advisable for board directors to meet after a meeting with the CEO. This increases efficiency and leaves less room for time-wasting in the actual meeting.
The contents of a meeting’s agenda should be one based on strategy and increasing productivity. It benefits a company to discuss forward-looking matters during their board meetings. Whether it be mistakes or successes, it is far too easy for the meeting to remain past reviews. Analysis of past progress is essential. The company can use this analysis to propel future endeavors. Future-oriented topics and debates should constitute at least 80% of the contents of a board meeting. This ensures that the company is moving forward.
- Constructive conversation
It is essential that, over the course of a meeting, the tone is constructive. This means that both directors and managers constantly challenge their systems. It is essential to address constructive and relevant questions and topics. Where company systems and strategies need updating, they should be scrutinized. By the end of a meeting, some consensus must be reached. A meeting can achieve this through constructive conversations.
- Voicing of opinions
Many people constitute aboard. These board members all have different ideas and opinions. The chair of the meeting allows directors to voice these opinions and ideas. There may be directors with critical thinking skills to share with the meeting or directors with new insights or methods. As different directors have different areas of expertise, each one should be addressed directly.
- Closing review
By the end of a board meeting, specific questions should be answered, such as, “Were we able to achieve what we set out to?” “What areas require improvement?” “What topics warrant further debate?” These types of questions serve as preliminary planning for the next board meeting.
- Meeting minutes
Meeting minutes are critical to the success of the board meeting. A review of the minutes takes place after the meeting. The recording secretary sends the minutes draft to the board chair. Within a week of the meeting, a draft of the minutes should be sent out for a full board review. The secretary receives the minutes after approval. The board of directors receives the minutes from the secretary. Marked minute drafts are those on which the directors have left comments. They serve as materials for the next minute. The signing of minutes takes place in the following meeting.
After the Meeting
The activities carried out after a meeting also matter.
These are follow-up activities that strengthen the progress made during the meeting. Some activities to carry out post-meeting include:
- Reviewing notes
Members of the board may have taken constructive notes over the course of the meeting. It is essential to review these notes immediately after when they are still relevant. These notes should also be accessible to directors and other meeting participants.
- Minute drafts
Within a week of the meeting, a draft of the minutes should be distributed. This is important enough to warrant repetition. There are methods to make minute dispersion easier. This means that a meeting draft is ready much quicker. Directors should also review and make comments on the meeting as promptly as possible.
- Between meeting materials
These are post-meeting materials that are relevant to the previous and subsequent meetings. They include things like the CEO’s report and quarterly reports. Another essential benefit of meeting material is that it contains the draft of the next meeting’s agenda. These materials take the information from the previous meetings and the directors’ comments. They include progress updates which are an essential part of meeting follow-up. These materials are necessary for the evaluation of the meeting.
Groupe Robert, a major North American logistics, transportation, and storage company, has chosen DiliTrust to digitize its records.
During the pandemic, Groupe Robert had to switch from primarily in-person operations to remote work where possible. Download our case study to learn how the DiliTrust Governance suite is making Groupe Robert’s remote activities easier and more secure.
Legal departments are set to face many challenges in 2021.
These hurdles include cybersecurity threats, data protection litigation, and the digitalization of work processes.
The good news is that legal management software can help legal departments overcome these obstacles. Here are the top 5 advantages:
Centralization of documents
Firstly, legal professionals have to manage a staggering amount of data—whether it is court dates, contact details, pleadings, or other precious documents. Litigation management software secures and streamlines the process of organizing records, eliminating room for error and inconsistencies. Having direct access to synchronized data is a massive asset for legal professionals on tight schedules.
Additionally, software litigation solutions facilitate communication between legal teams and their clients. With the client experience set to be a priority in 2021, strong communication is critical. With all of the finer details, court dates, and contact info readily available, correspondence is more fluid. Moreover, legal management software coordinates communication within teams and ensures all members are abreast of the latest news.
Mobilization of important documents
Legal professionals are frequently on the move. They must have easy access to calendars, case briefs, and other necessary documentation. Case management solutions ensure legal teams have easy access to records in real-time and leave no risk that critical data could be lost or stolen.
Next, the digitalization of the legal process results in smoother operations and more time to focus on the bigger picture of the litigation process. This is a critical advantage for lawyers who depend on time management to be successful and productive. Furthermore, E-signatures automate the paperwork process, saving time on administrative tasks.
Security and risk mitigation
Finally, litigation software protects data with the highest security standards. Data litigation by individuals is set to be a trend in 2021, and it is critical legal professionals handle their data securely and in accordance with the latest compliance regulations. Legal teams using management software can be confident they are safeguarding themselves from costly mistakes.
In conclusion, litigation management software helps secure sensitive documents, boosts communication, and simplifies the entire litigation process from A to Z, bringing legal teams into the future.
Governance as a corporate affair is a controversial topic.
The term ‘governance’ generally refers to the method or practices used by an organization or country to manage affairs at the highest level. Therefore, governance can only be administered at the highest level of an organization.
For this reason, good governance is only achievable using systems and policies that ensure the repeatability and consistency of processes. The highest level of authority in the corporation must be able to cascade transparent, accountable, and effective policies. In turn, this has a positive influence on the general output and performance of the corporation and one of the main reasons good governance is of significant benefit to organizational success.
Good governance not only boosts the reputation of the company but also has several benefits to its progress. Employees, stakeholders, shareholders, and other concerned groups can rest assured that the organization is in good hands at the highest level when good governance is considered.
7 Benefits of Good Governance for Corporations
The benefits of good governance for any organization cannot be overemphasized. Good governance is essential, as is a key player in the actualization of the organization’s goals and dreams. Below are some of the benefits that arise from good governance.
1. Efficient Processes
To start, good governance ensures consistency and repeatability in a corporation. In turn, the overall productivity and efficiency of the organization are boosted.
2. Visibility of Errors
Next, when the organization adopts the principles of good governance, transparency and accountability become the watchword. As a result of this, board directors can quickly spot errors that can affect the organization. The equity between the board directors also allows for experiences and opinions to be shared openly. This allows for a dependable corporate structure that is error-proof.
3. Smoother Running Operations
With all members of the boardroom working in unity, there are smoother operations. The characteristics of good governance ensure that the members of the boardroom are mutual in their decisions. This saves time for other essential company discussions, thereby ensuring faster and convenient operations.
4. Good Reputation
The overall output of good governance is the right products and services. This leads to good business performance and possible domination of the market. Since an organization’s reputation can make or break it, good governance ensures it is the former, not the latter.
To continue, all organizations have issues that arise at some point. But an organization with acceptable governance practices can easily tackle these problems. There will be a reduction in the market’s impact, and very often, the risk will get contained internally.
6. Financial Sustainability
Good governance significantly reduces the threat of safety, legal, performance, and warranty issues that can affect the organization. This is why the corporate body can reduce unnecessary expenses and spend more on progressive needs. It also ensures that the stakeholders, shareholders, customers, staff, directors, and others are financially secured.
7. Effective Response to External Environment
Finally, the modern business world operates in an environment of constant change. The process of understanding these changes does not happen due to chances. It takes leadership, commitment, and resources from the governing body. This depicts the benefits of good governance to the appropriate response pattern of corporate bodies to changes in the environment.
Why organizations should adopt GOOD GOVERNANCE practices
In conclusion, the benefits of good governance should attract all organizations and their authority levels. It is an agent of business sustainability as well as profitability. It also builds a reputable image and healthy culture within the organization.
For any organization that seeks to adopt good governance principles, the nine most important are accountability, transparency, consensus orientation, responsiveness, participation, effectiveness and efficiency, equity, rule of law, and strategic vision.
The need to drive sales, win investors, and maintain good governance is why many boards have internal issues. There are various boardroom models that can improve the company’s growth. But the most ideal of all these board types is the Modern Board.
The modern board is a type of board whereby organizational leaders aim to display excellent performance in their workforce strategies.
They also aim to improve revenue generation and the organization’s innovation.
The modern board is the new focus of organizations seeking to make revenue growth more than their peers. The modern board is also able to handle unprecedented crises such as the coronavirus pandemic more effectively. To become a modern board, you must be able to shift from old workforce cultures into a new set of contemporary doctrines. These modern doctrines are what the most popular modern boards across the globe also adopt. These key excelling features are based on the information provided by the Accenture Modern Board 2020.
Below are five features of any modern board:
1. The Modern Board: the right mindset
Before your board can get tagged as being modern, it has to improve its management. Improving management can be possible by leading and setting the tone that guides important work strategies. Your board needs to have transparent accountability in the C-suite, including an appropriate level of board oversight.
When these practices are applied at the board meetings, there is the possibility that your board will double its effectiveness–especially when compared to the older methods of management
2. The Modern Board’s mission
Modern boards have a designated mission and work adeptly towards ensuring the success of this mission. With carefulness, diversity issues should be under study by the board. This is not limited to internal business issues but also those with external influence. With this knowledge, your board can then approach these problems with a prepared mission of addressing all matters related to internal and external diversity.
In a situation whereby racism and bias judgments are rampant in the workplace, your board must frown against this and even be ready to stand against diversity and well-being metrics.
3. Using metrics in boardroom discussions
Knowing that only what is measurable can be manageable, you can improve your board to a modern board by taking note of all statistics and data relating to your organization. In order to fulfill this, your board must be ready to measure and discuss workforce metrics frequently. It is advisable that these boardroom discussions should be monthly or quarterly rather than the biannual and annual alternatives.
Your board should also attentively review all financial data. Regularly reviewing data allows them to provide a clear-cut oversight on all the issues that can improve the organization.
For the organization to function effectively, there needs to balance the work requirements and the workforce. This is why your board should aim to excel at all matters related to increasing the workforce capabilities. These practices can include recruiting new employees, enlightening existing ones, and engaging them to maintain their talents.
5. The modern board: Makeup matters
In addition to all the qualities earlier mentioned, when modernizing your board, you need to ensure diversity in the boardroom to include a diverse set of board members. In turn, the organization will get a more varied workforce strategy unbiased to the employees and the general populace.
Summarily, modernizing your board is not about adding new members or updating your boardroom.
It is a series of calculated improvements that will influence change in your board.
Setting examples with the boardroom policies, ensuring accountability, setting a target, employing metrics to decision-making, increasing the workforce capabilities, and diversifying the board, are in all ways proven to ensure the modernization of your board.
Governance has been defined by various institutions using different perspectives.
The general definition, however, focuses on the rules and policies implemented by corporations. Hence, governance is the corporation’s approach towards implementing its rules and ensuring compliance with its policies.
On the other hand, good governance has an in-depth meaning of how the corporation manages its affairs. It is the government system that ensures that every member of a corporation has a sense of accountability. Groups and individuals under a corporation balance power and its assertions if they want to ensure good governance.
This principle of corporate governance leads corporations to achieve their goals.
Good governance also helps organizations set reputable images in their line of operation.
The Principle of good governance
However, the principle of good governance does not limit itself only to accountability, as other essential principles need to be in place before any organization can practice good governance. These additional characteristics are numerous and adopted differently by different corporations.
The most effective way to practice good governance is to ensure that the corporation always uses all of these practices.
The 9 Major Characteristics of Good Governance
Corporations implement many characteristics of good governance. But nine of them are the most important and widely accepted universally, and they include:
To begin, accountability is one of the essential practices of good governance, and it entails the responsible discharge of duties by the board of directors. These directors ensure that the decision-making process does not affect individuals, groups, shareholders, stakeholders, employees, or the general public. Additionally, practicing accountability increases shareholder confidence and helps organizations manage risks.
2. Consensus Orientation
Next, for a corporation to practice good governance, there needs to be a consensus among the members. The boardroom is mainly used for this purpose, and in-depth debates are essential recommendations in this room, as it allows for a diversity of the organization’s thoughts and actions.
Transparency is a principle built on the free flow of resources and information. Access to information and important issues need to be available to all corporation members at the right time. Moreover, the necessary information is also provided in enough quantity to understand and monitor them.
Corporations that practice good governance always adopt better communication practices between shareholders and stakeholders. This is done in due time to enable the provision of honest answers to the organization’s direction.
A standard corporation is recognizable with the effective communication practices by the members. This means that the members communicate effectively because they can participate collectively to achieve the corporations’ goals. Participation as a characteristic of good governance entails the proper assortment of skills, talents, abilities, experiences, and perspectives to the organization’s activities.
6. Effectiveness and Efficiency
It is equally essential that the corporation adopts measures that encourage increased efficiency in all departments. Increased efficiency can include introducing modern and advanced technology in order to increase the output of the organization’s activities. Additionally, some organizations also consider the environment when performing their duties and responsibilities.
Each board director and employee has equal rights in the corporation. Therefore, each individual should have the free will to express their opinions, philosophies, and experiences. No one should feel left out or feel that their views have less importance to those of others.
8. Rule of Law
The rule of law in good governance means that the board should be just in its decision-making process. Hence, there should be zero tolerance for injustice or partiality on the board. There might be circumstances whereby the board needs to seek professional counsel, guidance, or expertise when making their decisions.
9. Strategic Vision
Finally, corporations should have a board of directors with abilities to perform strategic thinking. Having a clearly defined strategic vision leads to the board developing a coordinated and systematic plan to achieve the company’s goals.
Corporate Governance and Corporate Legal Management in One Solution
Over the past year, Canadian companies have adjusted to the “new normal” through remote work and resilience. Some of Canada’s top Chief Executive Officers initially expressed reservations about remote work. However, they changed their attitudes as they saw productivity increase or remain at the same levels as pre-COVID. The main challenge is to further digitize the board and the corporate legal department to meet the needs of a permanent distributed workforce and Board of Directors.
Solutions that speak specifically to the corporate legal department and board’s needs are usually separate, and there is not a lot of selection for either on the market – especially in Canada. DiliTrust has designed its DiliTrust Governance suite, which combines our legal entity management and board portal offerings into one user-friendly solution.
Alternatively, suppose your company wants specific modules for different areas, such as just the Board Portal or just the modules you would use for the corporate legal department. In that case, you can pick and choose from the different modules in the suite to get precisely what you need.
The DiliTrust Governance suite consists of five modules: Board Portal, Entities, Contracts, Litigation, and Documentation Library.
The Board Portal module digitizes and empowers the board and corporate secretary with all of the tools they need to hold a successful board meeting online securely.
DiliTrust Governance suite for the Board
The Board Portal module allows your board to digitize meetings in a secure, reliable manner. Critical files such as board meeting agendas and the board pack can be transmitted between the board secretary and directors within the Board Portal, leaving email entirely out of the equation. This feature keeps your communications safe and secure, especially when directors are known to use personal email.
Within DiliTrust Governance, the Board Portal features also make the corporate secretary’s job much more manageable. Instead of emailing multiple updated versions of a board pack, changes are made to the original, and board members are notified of the changes. By the time the meeting starts, everyone has the most up-to-date version of all documents, so they are all looking at the right numbers and recommendations. This ensures all members are abreast of the latest changes and are adequately prepared for their meeting.
DiliTrust Governance Suite for the Corporate Legal Department
The remaining Entities, Contracts, Litigation, and Documentation Library modules are designed explicitly for the corporate legal department. The Entities module simplifies the management of shareholders, subsidiaries, and capital with clear organizational charts and legal documentation sorted by entity. The Contracts module centralizes contracts and documents and allows you to monitor the life cycle of leases and similar time-critical contracts so you can get on top of them before they become an issue. Litigation does the same with all litigation files, offering transparent financial and case management. The Documentation Library acts as a central repository for all important company files, with customized access rights. All modules provide complete traceability for audit and e-discovery purposes.
The Governance suite’s modular design allows for configuration. If you are already comfortable with the Litigation solution but find Entities appealing, you have the freedom to choose one or more other modules from the DiliTrust Governance suite to optimize your needs.
The Right Tech for the Board and Legal Department = Better Corporate Governance
Due to the rise of Environmental, Social, and Governance (ES&G) investing, companies are actively searching for ways to be more transparent to shareholders about their corporate governance practices. When board members can easily access the information in the corporate legal department (only when assigned access rights, of course), they have the opportunity to make better decisions. It makes it much easier for the corporate secretary to access the reports they need to pull together information for the board. Additionally, file transmission takes place entirely through the tool and not through more insecure methods such as email.
Most nonprofits and trade associations are digitally-savvy when it comes to fundraising, networking, and member engagement. However, internal software solutions used for everyday operations may not be a priority – and they should be.
The COVID-19 pandemic has elevated the importance of technology for remote work. It has also underscored the need to collaborate effectively and forced associations and nonprofits across Canada to reevaluate technology at all levels. One of the key ingredients in establishing trust between managers and directors is ensuring the timely flow of information, according to Larry Tapp, the dean of the Richard Ivey School of Business1.
Having the right solutions can enable trust by giving directors what they need when they need it. This viewpoint is also highlighted in an article from the Harvard Law School Forum on Corporate Governance, “Technology and the Boardroom: A CIO’s Guide to Engaging the Board”; collaboration and cohesiveness are key2. While both are addressing technology implementation at for-profit companies, the basic standards remain the same for nonprofits.
Now, more than ever, associations and nonprofits require technology solutions that can enable the board, management, and employees to work together as a flexible and cohesive team. As with everything in association and nonprofit management, the collective will to upgrade is there, but where can your organization find the money – particularly in a time when most nonprofits have interrupted and vastly reduced cash flow? It starts with establishing a committee for evaluating the technology that is in place.
Part 1: Understand where your needs are and if some existing solutions can be removed
Through establishing a tech committee and evaluating their needs, Tech Networks of Boston found that multiple software solutions were in use for operations that were slowing down their organization’s work3. They suggest that representatives from each department be on the tech committee and a tech-savvy board member to get leadership buy-in. Once the committee is established, software and hardware inventories can be made, staff can weigh in on where they think more upgrades or training are needed, and the board can be in on the decision-making process.
The board itself can also use technology to ensure that its activities are streamlined and cohesive. A nonprofit board usually consists of busy community leaders who do not have time to read multiple iterations of a board book to see changes – they want one document ready for review prior to a board meeting.
Putting together materials for board meetings regularly consumes enormous amounts of staff time.
Much of this can be avoided by investing in board portal solutions that allow for materials to be changed, reviewed, and annotated quickly and easily. The same solutions also make communications more secure by keeping board communications within the solution rather than relying on emails.
Part 2: How to Find the Money
Not-for-profits: Techsoup & Government Grants
If your association has nonprofit status, you can take advantage of multiple private and government programs to subsidize your technology spend. Techsoup Canada is one such program4, which offers donated and discounted software from multiple popular vendors for a low administrative fee.
In addition, with the COVID-19 pandemic, there are multiple levels of extra government support5, some of which provide funding for technology upgrades (these tend to be at the regional6 rather than the federal level, such as some of the programs from FedNor).
What if your association is not a nonprofit?
If your association is a trade association or similar organization that does not operate as a nonprofit, it usually relies on conferences, membership dues, and sponsorships for funding. Since the pandemic began, most of these funding sources have dried up.
Traditionally, there is very little in the way of government or other support for trade associations, unless they are actively engaged in export activities7 – and even those do not cover technology upgrade costs for the most part. This means that trade associations usually operate on even more of a shoestring budget than a nonprofit regarding the technology they use, with a few small exceptions for those in the tech sector or those lucky enough to have deep-pocketed corporate members and sponsors.
This makes it even more important to establish a technology committee to see where money can be saved internally on software and other technology solutions, particularly since these can be responsible for many ongoing costs in the operations budget.
Communication is the key to building a solid relationship between management and the board, and in 2021 that means having the right technology tools in place to foster that communication.
When the board can easily access reports, files, and the other information they need to do their job, trust is built and governance of the organization is better served. During the economic recovery from the pandemic, it will be more important for directors and management to see what is happening within the organization – particularly from a financial perspective – in order to make nimble decisions. Technology will allow them to do that, but only if the right technology is in place.
Building Trust Between Managers and Directors, Larry Tapp. Ivey Business Journal; September/October 2002 edition
Technology and the Boardroom: A CIO’s Guide to Engaging the Board, Khalid Kark, Tonie Leatherberry and Debbie McCormack, Deloitte LLP. Harvard Law School Forum on Corporate Governance, 2019.
How a Tech Committee can Help Your Nonprofit, Tech Networks of Boston.
Introduction to the Technology Donations Program, Techsoup Canada.
Federal Government Covid-19 Measures – Implications for Sector Organizations, Imagine Canada. Last updated January 11, 2021.
CanExport Associations, Trade Commissioner Service, Government of Canada.
Keeping a company’s information confidential is a part of the fiduciary responsibility of each board member.
Confidential information could be proprietary technology, forward-looking business strategies, or anything that may hamper the company’s ability to do business should it be leaked to competitors or the general public. This confidential information also includes board minutes. Many companies will ask board members to sign a non-disclosure agreement to codify this aspect of a director’s fiduciary responsibility. Still, the duty of care exists whether or not such an agreement is in place.
Board minutes are considered confidential in Canada
Under the Canada Business Corporations Act (CBCA), board meeting minutes are confidential and are only available to the directors and the company’s auditor. There have been successful court challenges that have forced companies to enter portions of their meeting into evidence, but these examples are rare.
The reason is simple – the decisions of the board are public and consequential. However, how they arrived at those decisions may affect the perception of the organization.
For example, when you see a slick marketing campaign, it may have been built on a foundation of quickly jotted notes, last-minute work, and possibly some disagreements between the client and its ad agency.
Good thinking and leadership can sometimes arise out of debates and opposing views, and the final decision is what is put on public display rather than how it was arrived at.
Remember that the idea is not to hide information from shareholders but rather to avoid damaging the company itself in any way. Shareholders can still get all of the information they want and need without having access to board minutes, except in particular cases that your corporate law department can help to mediate.
The line between confidentiality and transparency
In the modern business landscape, investors are more likely to invest in a business that is transparent to its shareholders. Transparency is not about revealing confidential information but going over and above reports to stakeholders to account for board decisions, company financials, and so on.
Transparency is about ensuring that company ownership, executive compensation, and other data points that investors consider essential before making investment decisions are delivered in a clear, transparent manner. This includes not disclosing confidential information that may harm their interests by hurting the company.
The Government of Canada announced an initiative in 2020 to look at changing policy to strengthen Canada’s corporate transparency. While standardizing international rules for corporate transparency is one factor behind the initiative, the main one is making Canadian corporations more attractive to domestic and international investors.
Board portal technology can protect the confidentiality of your meetings and minutes
Despite whether or not board meeting minutes are confidential, they are always better managed through secure Board Portal software than sent by email.
The DiliTrust Governance suite’s Board Portal module makes it easy to assemble, protect, and securely transmit any documents and communications between board members.
Some of the world’s largest corporations, including Burger King and Sodexo, use DiliTrust with full confidence for all their governance needs.
DiliTrust adheres to the highest standards of data security, including:
- ISO 27001 certification, including an archiving and backup policy that preserves data integrity
- Full end-to-end encryption of all data, both at rest and in transit
- Three levels of security control at the server level; for more see our page on security
The Confidentiality of Minutes of Board of Directors Meetings; Vincent Plant, Langlois, July 21, 2016.
Director’s and Officer’s Duties in Canada; Nicole Kapos, DLA Piper, October 14, 2020.
Government of Canada strengthening corporate transparency for Canadian businesses; Canada Newswire, Yahoo News, February 13, 2020
Disruption continues to reign as we navigate a difficult year for Canadian boards. Our fact sheet holds the answers to the key areas that Canadian board self-evaluation should focus on for a stronger 2021.
Our fact sheet aims to provide clarity on what board self-evaluation should entail as directors look ahead to 2021 and envision more hopeful circumstances.
Board of directors can use it to pinpoint key areas of importance for directors to focus on as well as a selection of expert questions that will prove useful to appraising their board performance in 2020. This fact sheet aims to help directors to clarify the changing expectations as well as the individual and collective roles and responsibilities of its directors as global economies brace themselves for crunch-time. After all regular initiated board evaluations spell smoother meetings, streamlined information channels, increased influence, and yields a more attentive board in terms of both short- and long-term corporate strategy.
Find out how to optimize your board self-evaluation for a post-COVID 2021 by filling in the form below