Vancouver, BC – October 27, 2020 – Aprio Inc., North America’s most trusted provider of board portal software, today announced five impacts felt by boards of directors as COVID-19 continues to reshape board governance. The impacts span from the role of the board, to metrics for organizational health, and to how board technology has become essential to support timely and secure board communication.
As discussed by the Harvard Business Review, COVID-19 has rewritten some of the rules of modern corporate governance: the new environment is characterized by an increasingly complex set of pressures and demands from various stakeholder groups, heightened expectations for societal engagement and corporate citizenship, and radical uncertainty about the future. These factors are complicating board decision making and challenging the shareholder-centric model of governance that has guided boards and business leaders for the past several decades.
“As a technology provider that supports board communication, we’ve seen a surge in the volume of information being shared with boards and an increased frequency of meetings and board decision making,” commented Ian Warner, CEO of Aprio. “We took a deeper look at how the health organizations, public companies, credit unions, education institutions, and non-profit organizations we serve across North America are working through the pandemic and we observed some profound shifts in terms of board communication, the board’s role, and decision making.”
Here are the 5 shifts Aprio has observed in board of director behaviour and communication as a result of the pandemic:
As discussed by Corporate Compliance Insights, the role of boards of directors has become more hands-on with the pandemic. Decisions around business closures, dividend payments, HR policies for furloughs or caregiving for the ill, and cashflow management have come at boards rapidly. Among board portal users, Aprio saw a higher frequency of board meetings and greater board attendance during the initial phase of crisis management, as well as initiation of subcommittees on key issues from health and safety to pandemic financial sustainability. Where boards were deliberate about staying out of operations prior to COVID-19, the sheer intensity of decisions has required boards to shift to an “all hands on deck” approach.
In Aprio’s conversations with board leaders as the pandemic began, there were few organizations that didn’t have survival as the main topic on their agenda. COVID-19 shifted boards’ focus to assessing critical actions organizations needed to take to endure financially as sales revenue were likely set to drop and operations costs were likely to rise. Aprio observed a new focus on mapping business survival and protecting employee health, versus outdoing last quarter’s results, and this new trend has continued for more than half of 2020.
Before the pandemic, only some organizations were having conversations about their role in contributing to larger societal wellbeing, and COVID-19 brought that conversation to every boardroom table. Aprio serves many organizations with complex stakeholders including credit unions that are member-owned, health and education organizations with public stakeholders, as well as businesses with customers, employees, suppliers, and local communities. Board leaders and executives have shared the new lengths they are going to track not only the wellbeing of employees, but customers or members, especially those hardest hit by the pandemic. As the Harvard Business Review noted, seemingly overnight with the pandemic, “Instead of being the exception, robust oversight over sustainability, corporate responsibility, societal engagement, corporate citizenship, ESG—whatever you want to call it—has become the rule.”
Board administrators have shared that the pace of distributing information to board members has never been faster than the last six months. As executives scatter from head offices, and board directors sometimes even change addresses to be with family or help with caregiving, suddenly the only reliable way board administrators have to reach board members is an email and cellphone number. At the same time, the need to distribute information securely to board members went from quarterly to monthly, or even weekly early on. The result: board portal technology has gone from being efficient, to becoming essential.
Where a year ago there were board members who may never have done a meeting by video conference or consented to a motion with a digital signature, maintaining board work remotely has now been proven possible, and many have found it more convenient. The pandemic has pushed even technology-resistant board directors to try digital tools to participate in meetings, respond to board polls for decision input, and securely collaborate on highly sensitive board materials with secure annotations.
Will these shifts in board governance be lasting? That is one of the many things that remains uncertain as organizations continue to adapt to the pandemic. It is likely that the role of boards will eventually transition to being more hands off once again. However, what won’t change is the expectation for transparent information and communication. Even if boards lessen their day-to-day involvement, they’ll want to maintain the certainty of having access to information on organizational performance to meet stakeholder needs and achieve sustainability.
Aprio makes good governance simple and affordable. We help organizations large and small to achieve efficient and transparent board communication and well-run board meetings. The Aprio board portal provides premium features without premium pricing, all delivered with unmatched support and top security. Our simplicity and affordability make us the first choice of credit unions, banks, and financial institutions across North America. Founded in 2003, Aprio is proud of our reputation for the best customer experience in our industry. Subscribe to our blog to stay tuned for more details on our new product edition that will deliver ultimate ease of use and security to support North America’s boards.