Pre-IPO Firms and Board Portals: Elevating Corporate Governance
By going public, companies will need to commit to a comprehensive, time-consuming, and often expensive undertaking in order to satisfy listing requirements. But that in itself does not guarantee future success.
Corporate governance is an area that potential shareholders and stakeholders continue to scrutinise. Given the lengthy time frame involved in an IPO, it works to the advantage of pre-IPO companies to address, update and upgrade their governance systems early on in the process.
The use of board technology platforms continues to gain traction for that purpose. The adoption of board portals, in particular, helps companies adhere to best practices for good governance and accelerate their readiness for going public. Its use 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, or board management software, is a centralised, highly secure, online hub designed for board secretaries and directors to organise and manage meetings, access documents, and communicate with each other. With features such as 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 for Pre-IPO Firms
The use of a board portal makes sense for pre-IPO companies. Boards of these firms can collaborate and engage with both internal stakeholders and external advisors, ensuring alignment of overall direction, strategy and goals.
More importantly, utilising a board portal embeds transparency, accountability, confidentiality and proper record-keeping into the board’s processes—essential components of good governance expected from publicly listed companies.
With a board portal, pre-IPO firms are able to effectively deliver on the following:
Manage critical information from one central hub
With a board portal, pre-IPO firms can organise, gather and access documentation for building the prospectus, the drafting of agreements, resolutions, filings and letters from one central location. This provides a single source and version of truth for all involved in the process.
Because information is centralised, data requests from stakeholders handling different workstreams (e.g. auditors, underwriters, tax advisors, legal counsels, etc.) are easily managed. Retrieving information with ease and confidence saves time and effort for the multiple parties involved.
Minimise regulatory risks for non-compliance
One can easily identify and address gaps around board reporting with a board portal. All board documentation (e.g. board packs, meeting minutes, board correspondence, etc.) can be archived, stored, and searched within the system for record-keeping purposes while remaining accessible for regulatory or audit requirements. All processes remain traceable.
Streamline meeting workflows while saving on time and administrative costs
A board portal enables pre-IPO firms to go paperless. By digitising board and information workflows, they can reduce paper, labour, printing and postage costs. This figure can be significant when board packs have to be organised and subsequently printed out for each board member, or even re-printed should a new version be required.
When it comes to meetings, board portals make use of digital board packs which allows information to be delivered quickly and with more accuracy. Changes can be made on the fly and are reflected instantly. This ensures stakeholders work with the latest version of files at all times.
Collaborate and engage with board members and advisors inside and outside of the boardroom
Pre-IPO boards and executives can collaborate with fellow board members and advisors in between meetings, eliminating breaks and gaps in communication.
To further move priorities and objectives forward, tasks and action items can also be assigned to users of the platform. This keeps stakeholders accountable. Activities always remain transparent.
Agile decision-making is critical to the IPO journey. Board portals provide boards the ability to execute their governance tasks quickly and with ease.
The inclusion of features such as electronic voting allows directors to cast their votes on pending board matters during or in between board meetings. The results can be shared instantly. It eliminates the need to wait for the next board meeting to drive board conversations forward.
Another feature beneficial for pre-IPO firms would be the availability of e-signatures. The e-signature feature enables the board to sign documents securely and remotely—removing the logistical hurdles often involved in obtaining wet signatures. E-signatures speed up the approval process, enabling boards to set things into immediate motion.
Stay secure at all times
Given the perilous landscape of cybersecurity and the constant threat of data breaches and leakages, securing confidential information and correspondence should be of concern to pre-IPO companies. The use of a board portal can be of tremendous value in this regard. Most board portals implement rigorous security measures, employing granular file permission settings and advanced encryption frameworks to ensure data remains safe and secure.
In addition, board portals are typically standalone, independent platforms separate from the rest of the organisation. In the event of an organisation-wide cyber attack, the firm’s most important information assets remain secure and the board can continue to lead.
Rising to the Challenge
When effectively implemented, board portals can serve as an impactful governance solution for pre-IPO firms. It can promote efficiency gains, support good record-keeping, secure board-level confidential information, strengthen accountability and help manage risk. Pre-IPO firms that make the most of the technology not only understand the critical cornerstones necessary for a well-governed public company, but also display a readiness and maturity to meet the governance challenges that the IPO journey brings forth.
Praxonomy is the company behind Boardlogic, a cloud-based, centralised, highly-secure board management platform for company secretaries, executives, and directors of pre-IPO companies. Boardlogic streamlines board workflows and fosters engagement among board members while enhancing digital corporate governance for organisations around the world. It is the only board portal listed on the London Stock Exchange Issuer Services Marketplace. Website: www.praxonomy.com
On January 13th 2022, Praxonomy and Perivan announced partnership to drive adoption of Board Portals in the UK. The strategic partnership will work towards introducing board meeting management solutions for small-cap and medium-cap listed companies on the London Stock Exchange.
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