A board portal is a tool that can simplify the work of directors, help them reach targets faster, and help run the company better. In this article, you’ll learn the principles of corporate governance and how board management software can help you follow them.

What is corporate governance? In short, it’s the framework of rules, relationships and processes that determines how a company is directed and controlled — who makes which decisions, how they’re held accountable, and how the interests of shareholders, directors and the wider community are balanced. Board software was built to help directors manage a company better, maintain good teamwork, and hold more efficient meetings — but before looking at how a virtual board portal helps, it’s worth being clear on what good corporate governance actually requires.

Corporate governance in Australia

In Australia, principles of good corporate governance and best-practice recommendations are set out by two organisations: the Australian Securities Exchange (ASX) and the Australian Securities and Investments Commission (ASIC). ASX makes sure public companies in Australia follow its governance requirements.

A firm can avoid the need to comply with the ASX Listing Rules and ASX Principles by remaining a proprietary company. However, that business will then be restricted in terms of fundraising and its maximum number of shareholders. In fact, some large public companies that aren’t listed voluntarily follow ASX’s principles and recommendations to maintain sustainable corporate governance.

Another Australian corporate regulator — ASIC — issues regulatory guides that aren’t mandatory to follow. They express ASIC’s view of the existing law and help businesses understand how the regulator will exercise its powers when required. These guides are additional support for companies pursuing good corporate governance. Firms in certain industries also have to comply with additional authorities — for example, companies offering financial services are overseen by the Australian Prudential Regulation Authority and must follow APRA’s Prudential Standards.

Principles of good corporate governance

Here are the principles of corporate governance laid out by ASX in its latest published edition. There are eight of them:

  • Solid foundations for management and oversight. A business should clearly understand the roles of each board member and manager, and review their activity regularly.
  • An effective board structure that adds value. The board should have the right number of directors with the skills and judgement needed for effective governance.
  • A lawful, ethical and responsible corporate culture. A business should continually promote a healthy corporate culture and make sure the company follows this approach.
  • Protect the integrity of corporate reports. A company should safeguard the integrity of its corporate reporting.
  • Disclose information in a timely and balanced manner. A firm should disclose data that could affect the price or value of its securities.
  • Respect security holders. A company should give security holders the data and facilities to exercise their rights effectively.
  • Plan and manage risks. A business should have a sustainable risk management plan and review it regularly.
  • Reward fairly and responsibly. A company should reward its board members and senior executives enough to attract and retain skilled directors, aligning their interests with the company’s goals.

Board software and corporate governance

So how can board software help Australian companies meet these corporate governance recommendations?

First, it lets companies keep corporate documents online and available to authorised users — useful when a firm needs to disclose information and give security holders the data they’re entitled to. Sharing files within a virtual board room is simple: keep the documents current and correct, then invite the relevant third party to access them.

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Providers also invest heavily in security, protecting the files customers store in their virtual boardrooms from data leaks — which supports the fourth principle above, protecting the integrity of corporate reports.

Board software also helps directors collaborate and use their collective skills and knowledge more effectively, through secure chats, voting features and other tools that improve communication and teamwork. Since most virtual board rooms include a task manager, directors can make sure no plans get forgotten and every process is executed on time.

Finally, a board portal reduces the time directors spend preparing for and running meetings. Since everyone can review materials beforehand, directors arrive ready to discuss rather than to catch up — and because virtual boardrooms record meetings, members can revisit a discussion later for more detail or context.

FAQ

Corporate governance is the framework of rules, relationships, systems and processes that determines how a company is directed and controlled, including who makes which decisions and how they’re held accountable.

In Australia, the ASX Corporate Governance Council sets out eight principles, covering board structure, corporate culture, integrity of reporting, timely disclosure, respecting security holders, risk management, and fair reward — see the full list above.

Good corporate governance protects shareholders and stakeholders, reduces the risk of financial and reputational harm, and helps a company make better long-term decisions by making sure oversight and accountability are built into how it operates.

The ASX Corporate Governance Council sets governance principles for listed companies, ASIC issues regulatory guidance on how the law is applied, and industry-specific regulators — such as APRA for financial services — add further requirements for regulated sectors.

Board software supports governance by centralising and securing corporate documents, creating an audit trail of decisions and approvals, and giving directors the collaboration and reporting tools they need to meet disclosure and oversight obligations.