Rise Of The Paperless Meeting
Once upon a time, Gerhard Roggeman would have disagreed with the saying that it is better to travel than to arrive. As a director on the board of a clutch of international companies, he spends much of his work life travelling and much of that travel time weighed down by thousands of pages of board meeting paperwork.
His burden will be a familiar one for many executives and company secretaries â€“ one London-listed company recently even had to helicopter documents to a director located on an island off the coast of Australia.
Since Apple's iPad ushered in the age of the tablet in 2010, however, it has become easier to convince board members â€“ many of whom are barely acquainted with a laptop, to consider a portable digital.
"It is a huge progress in technology," says Mr Roggeman, who now uses his iPad for board meetings at Resolution, the insurance consolidation vehicle, and Deutsche BÃ¶rse. "It really facilitates my job."
As directors begin to swap wads of documents for tablet devices, stuffy boardrooms stacked with papers are turning into scenes more akin to science-fiction films. According to Diligent, a digital solutions business, its clients include 20 FTSE 100 that now use iPads in their board meetings â€“ including Barclays, retailer Kingfisher and Weir Group, a pumps and valves manufacturer. The tablets are mainly used with apps that allow companies to consolidate boardroom documents into "virtual boardbooks".
Edis-Bates Associates, a consultancy, found that 40 per cent of 150 London-listed companies surveyed last year were using electronic means to distribute board meeting documents. "It is all changing at a tremendous pace," says Jon Edis-Bates, the company's principal consultant.
"The iPad was the real trigger," says Paul McKenna, company secretary at insurance company Standard Life, which has been using virtual iPad boardbooks since September. Its adoption for board meetings was recommended by one of its directors, William Black, who had already been using his own iPad for board meetings at the Bank of Canada. Since then, Standard Life has equipped four of its boards and 43 committees across the world with the devices.
Lonmin, a FTSE 250 platinum producer, first began looking at digital solutions in 2006. But it was not until last year that the board made the switch to using digital boardbooks at meetings. "There was a hell of a lot more room on the table," says Rob Bellman, Lonmin's company secretary as he recounts the first fully digital board meeting. "There just aren't the piles of paper there used to be."
Others argue that any tablet-enabled boardroom revolution should be about more than saving space and eliminating paperwork. "The potential is there for the technology to help give the board better knowledge of the company," says Didier Cossin, professor of finance at IMD. The devices, he says, are currently being used in a static way rather than a tool for managing and exploiting information. "It's just posting documents, which I don't think is the best use for the technology."
David Yoffie, professor at Harvard Business School, is equally sceptical about whether adoption of tablet devices and virtual boardbooks has fundamentally changed the way boards operate. "[Change] may come as people find ways to take advantage of the technology, but today it's just an ereader and, at least on the boards that I sit on, if it's just an ereader it doesn't really change the underlying dynamics going on in the boardroom."
Boards will have to wait for that shift to happen. "I had some board members who used the iPad during a meeting to take pictures â€“ one who took a picture of the guy in front of him who was angry," recalls Prof Cossin, who sees such initiatives as having the potential to make the board room more transparent.
He also points out a possible drawback: board documents compiled for digital consumption can tend to be lengthier than those compiled on paper with a mind to the constraints of space and weight.
"With new iPads coming in, people are swamped with documents which can be highly inefficient in terms of governance because you can overwhelm them with documents," he says.
A growing number of companies have cropped up to offer digital solutions for boardroom meetings. These include California-based BoardVantage, Diligent, and Projectplace.
Several companies and institutions have also introduced virtual boardroom applications for their clients, such as Nasdaq OMX, Computershare, the Institute of Chartered Secretaries and Administrators, Perivan and Thomson Reuters.
Diligent, which provides an iPad app and software to help companies compile virtual boardbooks, saw licence revenues for digital software increase to $6m in the fourth quarter of 2011, from $500,000 in 2008. "We reached that tipping point in the second half of last year in the UK," says Simon Small, a company executive. "It became more of a conversation in the corporate community driven by the fact that iPads had been out for a year."
Directors Desk, a US company that was bought by Nasdaq OMX in 2007, now has 20,000 users. It offers an online platform for Nasdaq-listed companies to upload documents to share with board members and executives.
However, it has not all been smooth sailing for the company, which last year was the target of hacking that compromised a handful of Fortune 500 companies. The attacks, which are being investigated by the Federal Bureau of Investigation and the National Security Agency, underline a major vulnerability for companies who choose to place market sensitive information on digital platforms and devices.
Tom Kellermann, vice president at cybersecurity company Trend Micro, says that just because these products are encrypted, it does not mean that they are safe. "It shows arrogance on the part of the world's corporate elite to assume they will build an infrastructure that other individuals cannot break into," he says. "They are rushing to create this efficiency and access to capabilities without doing their due diligence on securing that infrastructure," he adds.
One headhunter notes how, in an effort to strengthen security, some companies have equipped directors with iPads that they can use only for that particular board. As a result, directors sitting on the boards of different companies can face a high-tech variant of the original problem â€“ but instead of clutching a pile of papers they have to carry a stack of different iPads.