Best practice board paper retention in the electronic age

A client recently asked for advice on best practice when it comes to the retention of board papers.

I had to compose myself to provide the answer as my head filled with images of the silly things people have scrawled in the margins of their hard copy papers and filed them, only for the scribbles to return at a later date to haunt them!

Yes, I’m pretty sure we all have some scary stories to share – and I’ll do so a little later – but for now, let’s consider what constitutes best practice.

It’s largely being driven by the ever-expanding capabilities of technology, ushering in the paperless era pirouetting around the portal.

Gone are the days when board papers were prepared in hard copy and circulated to each director; going, too, are the days of their arrival via email as pdf files; both practices making way for the online portal and its promise of ease of access and security.

The need for retention of board papers by the board or individual directors goes hand in glove with the calibre of the minutes of board meetings.

If minutes are a correct record of the major deliberations prior to the board taking a decision or noting a report, the board papers and the minutes, signed off by the Chair represent a standalone record of the particular board meeting.

At the conclusion of board meetings the Company Secretary retains copies of board papers and minutes, with all others shredded or deleted from computer files.

Stored in a central repository, the sole copy is accessible to directors at any time to allow them to “check the records”. And the best central repository is the online board portal.

This, in a nutshell, is best practice.

All email communication between directors and directors and management then occurs through the board portal. Directors access the portal to prepare for board meetings rather than receive individual board packs.

And in this brave new world, there is no need to keep individual copies of board papers with personal annotations, whether in hard copy or on computers.

All of which means farewell to the chances of scribbles along the lines of “getting rid of this clown of a CEO is long overdue…” coming to light.

Or, in another classic shareholder litigation case, having a document discovered that contained a board member annotation reading: “delete disclosure of quarter-end backlog so it doesn’t look like we closed the quarter early.”

Perhaps best of all, though, the modern online board portal has a sophisticated capability to eliminate imprudent emails sent between directors where sentiments such as “if we can eliminate (the target company) we can monopolise the market” are expressed.

Until next time,
Kate.

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