Board membership may have its privileges, but in this era of increased regulatory scrutiny, it also has its risks. This is not to say that sitting on a board of directors is a bad gig. Serving on a board remains one of the most effective ways for executives to network. It can offer rewarding work to those who have decided to step back from full-time jobs. And despite the hue and cry over executive compensation, board members get paid handsomely for their efforts: directors at larger companies typically rake in more than $100,000 in annual total compensation.
Still, these days they earn it. The Enron scandal initiated a new level of liability concerns; the Sarbanes-Oxley Act of 2002 (Sarbox) effectively multiplied the workload for any director willing to take on the job. Meetings are longer and more frequent. And it’s arguably toughest for CFOs, who almost inevitably end up on the audit committee of the boards they join.
Longer meetings and heftier reading loads can create real headaches for directors. In some instances, just coordinating the topics for committee meetings can be a pain. Tom Lienhard, who serves on two boards, knows the problem only too well. “Everyone is very busy, so our work carries over from month to month,” he says. “Every month we have the same thing on our agenda. It drives me nuts.”
To address this vexation, Lienhard’s boards (including the Ronald McDonald House Charities of Spokane, Wash.) recently installed an online software package called Director’s Desk. The program, which is designed specifically for board and committee members, is intended to solve many of the logistical problems directors encounter. Using the software, for example, executive-committee members can conduct meetings online. Says Lienhard: “We’ve actually been able to get a lot more done in less time.”
Director’s Desk is one entry in an emerging category of software aimed at streamlining board communication and increasing board interaction. Some of these programs, including BoardVantage as well as Director’s Desk, provide virtual meeting places for board members, along with specialized document management and communication tools. Others, like the suite from The Board Institute, based in Phoenix, help directors assess their own performance. Bret Beresford-Wood, CEO of Director’s Desk Corporate Governance Services, in Post Falls, Idaho, believes the board-software market is set for a takeoff. “In three to five years, a majority of companies will have some form of board-management system.”
Is This Anything?
The argument is that using IT to enhance board communication is a logical extension of current practice. “Many CEOs communicate via letter to board members in odd months,” says Jay Lorsch, a professor at Harvard Business School and co-author of Back to the Drawing Board: Designing Corporate Boards for a Complex World. In fact, Lorsch is such a believer that he works with a company that is developing software to enhance board communication. “Technology can provide a valuable way for board members to stay plugged in,” he says.