ABA Banking Journal - July 2007 - (Page 40)
Compliance Clinic Should you “plug in” your board of directors? Adopters of “board portals” find increased efficiency and time savings, but decision requires attention to security heresa Cornish faces that bane of bank board secretaries every month—getting the board books set up and into directors’ hands in time for them to digest a huge amount of information prior to their meetings, full board or board committee. The sheer volume of information to gather is daunting. Cornish serves as vicepresident and assistant corporate secretary at Sandy Spring Bancorp, Inc., a $2.9 billion holding company based in Olney, Md. The 14-director board’s regular book runs upwards of 200 pages. Other banks’ books can run even longer. Cornish says that Sandy Springs’ governance team generally aims to have the complete book for a board or committee in members’ hands a week in advance of regular meetings. This can be a challenge, with financials and other documents and reports sometimes delayed, sometimes replaced with updated or revised versions, and the invariable surprises or changes to agendas. (Some banks provide board books solely on their premises and don’t permit directors to have the materials offsite at all.) T Taking the electronic route About two years ago, Sandy Spring’s management and board began using an alternative approach to the traditional paper book sent via mail or express services, a category of product broadly called “board portals.” By Steve Cocheo, executive editor. Cocheo is also editor of ABA Bank Directors Briefing newsletter. An expanded version of this article will appear on the newsletter’s website, www.bdbonline.biz, in July. It will include additional aids. 40 JULY 2007/ABA BANKING JOURNAL Like most of the products in this category, the one that Sandy Spring chose— Diligent Boardbooks, from Diligent Board Member Services, New York—is centered on a secure website where directors can go to access confidential company data from anywhere they can reach the internet. Nowadays, instead of waiting for an entire paper book to be completed and ready for shipping, Cornish and the bank’s team upload portions of the board book to the site as each is ready. Directors get more lead time this way. In a time when directors have more to do than ever, this factor by itself has proven a tremendous advantage, according to Cornish. “Our board has converted over to this approach without a lot of pushback,” Cornish says. (Most portals reviewed provide on-screen books that look pretty much like their original paper-based antecedents.) Only one director still insists on receiving a full, printed board book. “There was a learning curve,” Cornish elaborates. “We consider ourselves technically savvy,” but it took some time for the staff and the board to get used to the new approach. It’s not always the bank leading the board into this new venture in governance. “Our directors are itching for a little more technology, particularly our newer, younger directors,” says Bill Grant, chairman and CEO at First United Corp., Oakland, Md. Grant’s $1.4 billion-assets company, which has a particularly large board of 17 directors, including two insiders, is in the midst of adopting Directors Desk, offered by Directors Desk, Inc., New York. Many of Grant’s directors maintain heavy travel schedules, so making sure that board packages and materials go to where the
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