Pre-IPO Firms and Board Portals: Meeting the Challenge of Governance Excellence
Listing a company on a public stock exchange can be a complex, time-consuming and expensive task. But that does not guarantee future success.
Given the lengthy time frame for an IPO (initial public offering), it is wise for pre-IPO companies to update their governance systems early in the process since this is an area potential stakeholders and shareholders will scrutinize.
Technology platforms such as board portals (or board management software) can help companies adhere to best practices for good governance and accelerate their readiness for going public. Using board portals can signal to regulators and potential investors that the company is well-governed and positioned for long-term value creation.
Defining Board Portals
A board portal is a centralized, highly secure, online hub designed for board secretaries and directors to organize and manage meetings, access documents and communicate. They also include digital board packs, e-signatures and voting. Board portals allow board members to execute their governance obligations efficiently and securely, at any time, from any device and location.
The Benefits Of Board Portals
The use of a board portal makes sense for pre-IPO companies. The technology lets board members collaborate and engage with both internal stakeholders and external advisors, ensuring alignment of overall direction, strategy and goals.
More importantly, a board portal embeds transparency, accountability and confidentiality into a board’s processes – all essential parts of good governance.
With a board portal, pre-IPO firms can effectively deliver on the following:
1. Manage critical information from a central hub
Using a board portal, pre-IPO firms can organize, gather and access documentation for building the prospectus and draft agreements, resolutions, filings or letters from a single source and version of truth.
Because information is centralized, data requests from stakeholders handling different workstreams (for example, auditors, underwriters, tax advisors, legal counsels, etc.) are easily managed. Being able to easily retrieve information saves time and effort.
2. Minimize regulatory risks for non-compliance
The software makes it simple to identify and address gaps in board reporting. All board documentation (board packs, meeting minutes, board correspondence, etc.) can be archived in the system while remaining accessible for regulatory or audit requirements. All processes remain traceable.
3. Streamline meeting workflows while saving on administrative costs
By digitizing board and information workflows, pre-IPO firms can reduce paper, labor, printing and postage costs. This can be significant when board packs must be organized and printed – or re-printed – for each member.
For meetings, board portals use digital board packs so information can be delivered quickly and accurately. Changes can be made on the fly and reflected instantly so all stakeholders can work with the latest version of files.
Another beneficial feature is the e-signature which enables board members to sign documents securely from anywhere – speeding up the approval process.
4. Collaborate with board members and advisors inside and outside the boardroom
Pre-IPO boards and executives can collaborate with fellow board members and advisors in between meetings, eliminating gaps in communication.
To further move priorities and objectives forward, tasks and action items can also be assigned to users of the platform. This transparency keeps stakeholders accountable.
5. Stay secure
Given the constant threat of data breaches and leaks, securing confidential information should be of top concern to pre-IPO companies. The use of a board portal can be of tremendous value here. Most board portals adhere to rigorous security measures, with advanced encryption to ensure data remains secure.
Board portals are typically standalone, independent platforms separate from the rest of the organization. In the event of an company-wide cyberattack, the firm’s most important information remains secure and the board can continue to lead.
Rising To The Challenge
When effectively implemented, board portals can be a great governance tool for pre-IPO firms. The technology can promote efficiency gains, support good record-keeping, secure board-level confidential information, strengthen accountability and help manage risk. Pre-IPO firms using the technology will understand the importance of a well-governed public company and be ready to meet the tough governance challenges of an IPO journey.
Praxonomy is the company behind boardlogic, a cloudbased, centralized, secure board management platform for company secretaries, executives and directors. boardlogic streamlines board workflows and fosters engagement among board members while enhancing digital corporate governance for organizations around the world. It is the only board portal listed on the London Stock Exchange Issuer Services Marketplace.
Author:
Carissa Duenas:
Carissa Duenas is a marketing consultant and content contributor for Praxonomy, the company behind Boardlogic, a simple, secure platform for boards to manage meetings, share documents, collaborate and execute governance activities. She began her management consulting career at Accenture and has since worked in a consultant capacity for leading organisations in the technology sector and communications space.
Contact Person:
Tim Gilkison is business development manager for Praxonomy, and a founder of the In-House Community group. You may contact Tim at tim.gilkison@praxonomy.com.
*This article is the IHC Magazine’s off-shore update for July 2021 issue. Click here to read the full magazine
