Board portal is an ultimate tool that can simplify the work of directors, help them reach targets faster, and rule the company better. In this article, you’ll find out the principles of corporate governance and how board management software can help you follow them.
Board software was created as a solution for businesses that can help directors manage the company better, maintain good teamwork, and hold more efficient meetings. But before diving into how a virtual board portal can help directors, let’s figure out what is good corporate governance.
Corporate governance in Australia
In Australia principles of good corporate governance and best practice recommendations are defined by two organizations: the Australian Securities Exchange (ASX) and the Australian Security and Investments Commission (ASIC). ASX makes sure that public companies in Australia are following the governance requirements.
A firm can avoid the need to comply with the ASX Listing Rules and ASX Principles by remaining a proprietary company. However, then this business will be restricted in terms of fundraising and the maximum number of shareholders. In fact, some large public companies that are not listed voluntarily follow the principles and recommendations issued by ASX to ensure sustainable corporate governance.
Another Australian corporate regulator — ASIC — issues regulatory guides that are not mandatory to follow. They express the view of ASIC on the existing law and helps businesses understand how this authority will exercise its powers when required. Also, these guides are an additional help for companies in good corporate governance.
Firms that operate in certain industries have to comply with the standards of additional authorities. For example, companies that offer financial services are controlled by the Australian Prudential Regulation Authority and have to follow the APRA’s Prudential Standards.
Principles of good corporate governance
Now let’s take a look at the principles of corporate governance laid out by ASX in the latest issue. There are eight of them:
- Solid foundations for management and oversight. It means, that a business should understand clearly the roles of each board member and every manager, and review their activity regularly to make sure they perform well.
- An effective board structure that adds value. A team of directors should be of a necessary number of participants that collectively have the required skills and intelligence required for the efficient governance of the company.
- A lawful, ethical, and responsible corporate culture. A business should continually promote a healthy corporate culture that is ethical, lawful, and responsible, and make sure the company follows this approach.
- Protect the integrity of corporate reports. A company should make sure that the integrity of corporate reports is safeguarded.
- Disclose information in a timely and balanced manner. A firm should disclose all the data concerning its activity that might have an impact on the price or the value of securities of this organization.
- Respect security holders. A company should give its security holders all the required data and facilities so that they can exercise their rights efficiently.
- Plan and manage risks. A business should have a sustainable risk management plan and review it from time to time.
- Reward fairly and responsibly. A company should reward its board members effectively enough to attract and refrain skillful and efficient directors. A reward should let directors and senior executives align their interests with the goals of a company.
Board software and corporate governance
So, how can board software help Australian companies to comply with the corporate governance recommendations?
First of all, this tool allows companies to have their corporate documents online and available for authorized users. This is quite useful when a firm needs to disclose information and provide security holders with the required data. It’s easy to share files within a virtual board room — all you need to do is to make sure the documents are up to date and correct, then you can send an invitation to a third-party so they can access the information.
Also, providers pay a lot of attention to the security making sure the files their customers store in their virtual boardrooms are protected. Therefore, you remain safeguarded from data leaks, and it allows your company to comply with the fourth principle of corporate governance — “Protect the integrity of corporate reports”.
Moreover, board software allows directors to collaborate efficiently and truly use their skills and knowledge collectively. This tool provides board members with secure chats, voting feature, and other tools that will improve communication and teamwork. And since most virtual board rooms offer a task manager, directors can as well make sure no plans are forgotten and all the processes are being executed in a timely manner.
Finally, board portal reduces the time directors need to spend on meetings. Since everyone can share required files with each other and study them before the event, all board members have a chance to arrive at a meeting prepared for a discussion. Therefore, they won’t have to waste time on updates. Instead, all directors will remain focused on the solutions. And thanks to that virtual boardrooms allow to record meetings, members can get back to the discussion later to get more insights or for other needs.