5 Questions Boards Should Ask After an Audit

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External audits usually provide companies with a fresh perspective on their financial health and reporting practices. It’s important that your board, or more specifically, that your Audit Committee asks the right questions in order to make the most out of the findings you receive. Here are some of our suggestions for queries we think you should address with your auditor or auditing firm:

1. Did you have any difficulty interacting with employees or accessing information while collecting data?

It’s important that companies establish a culture of forthcoming reporting. If a member of your internal team was not cooperative with the auditor, or if records were extremely hard to locate, you may have some internal issues to address. Additionally, if auditors are unable to obtain thorough records, it could lead to an incomplete report.
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Avoid the Dreaded Boardroom Burnout

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The expectations for board members have been on a sharp rise for the past two decades. Companies are relying more and more on their directors both inside and outside of meeting settings, and with that dependence comes an often inevitable outcome: boardroom burnout.

Although directors at for-profit companies may feel this strain, it’s especially common among their nonprofit counterparts. Since nonprofit board roles are usually volunteer-based, it’s not uncommon for members to take early or unexpected exits from their positions. Here are some tips for avoiding “boardroom burnout” situations.

Don’t take on more than you can handle

It may sound simple, but if you can’t tackle the extra hours needed to head up a committee or act as the board secretary, politely decline those leadership positions. It’s better to stay in a less demanding role (if you still feel connected to the cause) than it is to leave and force the organization to fill a void.
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Board Communication: Is Your Solution Effective?

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Rather than investigating a forward-thinking board software product, many organizations attempt to create a “free” in-house workaround in hopes of saving on their bottom line. While this option doesn’t have a price tag directly attached to it, it does cost the organization in other ways—namely in efficiency, man-hours, and security. Oftentimes, companies direct their IT departments to set up an FTP, or File Transfer Protocol, network to act as a file sharing server for board members. These FTPs may accomplish the basic goal of delivering information, but they don’t do much in the way of bettering boardroom communication or decision-making. 

Is it efficient?

Sharing information through an FTP may seem quick and easy, but is it really efficient for boardroom processes? For instance, board books usually get updated multiple times before in-person meetings. With an FTP site, you’ll have to repeatedly load new versions of the document and then alert board members to them. With a board software solution, you can simply amend the existing board book instantaneously. Not to mention, board members can view the latest version of the board book with or without Internet access—something an FTP site is intrinsically unable to support. Continue reading

Warren Buffett’s ‘10 Commandments’ for Board Leaders

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Warren Buffett is perhaps the most recognized name in the history of American corporate governance. As the leader of Berkshire Hathaway, a multinational conglomerate holding company, Buffett has become one of the most accomplished businesspersons of all time. Because of his immense success, Buffett’s advice carries with it great weight and authority. Many of his essays and letters have been collected for publication, and he’s known among journalists for his quotable quips and reasonable advice for investors.

Recently, a George Washington University professor named Lawrence Cunningham compiled a list of Buffett’s most important guidelines for corporate directors, which was published in the latest edition of NACD’s Directorship magazine. You can read a condensed and edited version of that article here. These “ten commandments” for business leaders, as Cunningham calls them, are what Buffett cites for his vast amount of boardroom triumphs.
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Understanding the Types of Shareholder Lawsuits

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Boards exist to protect shareholders based on the fiduciary duties of care, loyalty, and good faith. If shareholders feel that those duties have not been met by a board or board member, they can take legal action against them. The “business judgment rule” protects boards and board members from lawsuits for simply making bad choices. As LegalMatch shares, “The business judgment rule requires that courts defer to the board of directors in business matters. The only exception to the business judgment rule is if shareholders can show that the board of directors engaged in fraud, illegal activities, or were grossly negligent while managing the corporation.” In other words, boards are afforded the right to make bad business choices as long as there is evidence they were acting in good faith. If shareholders do believe that the board or a board member has engaged in one of those wrongful practices, they have two options for types of lawsuits: a direct lawsuit (also called shareholder class action lawsuit) or a derivative lawsuit.
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Directorpoint Wins Awards From FinancesOnline

screen-shot-2017-06-28-at-4-23-58-pmFinancesOnline, a popular review platform for software and B2B services, recently published a detailed review of Directorpoint‘s board software product. They highlighted Directorpoint’s ease-of-use, useful features for board productivity, and dedication to security as well as how Directorpoint simplifies the entire board experience.

In addition to this review, Directorpoint is proud to have received two awards of distinction from FinancesOnline: the Great User Experience Award and the Rising Star Award. Furthermore, FinancesOnline reviewed Directorpoint’s mentions across various social media channels in order to measure user satisfaction and were only able to locate positive comments and reviews.

We work hard every day to ensure that our users have an outstanding experience using our board software. Our intuitive platform helps launch the boardroom experience into the modern age–while streamlining meeting preparation and overall communication. Many thanks to FinancesOnline for recognizing our efforts!

If you would or your board of directors would like to try our world-class software please reach out and schedule a brief demo, so we can show you how our intuitive desktop and mobile app can help your board make better decisions.

Taking an Unpopular Stand as a Board Member

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Disagreement is a natural part of the boardroom process. In fact, it’s an integral element in decision-making. Diversity of thought helps board members analyze their options from varying angles, which ultimately helps them make better choices as a collective. From time to time, however, you may find yourself as the odd man out. First and foremost, don’t worry; it’s OK to take an unpopular stand, but there is a more effective way to way to do it. Here are our suggestions:

  1. Don’t go silent.

For many directors who realize they’ve adopted an unpopular stance, the choice to go silent makes the most sense. While you may believe that you’re being a better group member by bowing out of discussion, you could actually be doing a disservice to your board. Keep in mind that your opinion has equal value in the board setting, and you may be looking at a problem from a truly unique angle that others need to hear.
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Navigating Corporate Bankruptcy on a Board of Directors

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Because board members have a financial duty to their shareholders, the time may come when an insolvent organization must consider the option of bankruptcy in order to protect those investors’ interests. In many states, creditors are also designated as stakeholders and must be considered, too. Depending on the type of bankruptcy that is filed, board members may continue to operate in their directorial positions.

As an organization approaches the position of insolvency, board members must consider the options in front of them. According to the Houston Chronicle, “Conducting a thorough financial review and seeking professional help are now the primary concerns. Directors should avoid resigning because those who quit rather than engage themselves in the bankruptcy proceedings are generally viewed as being in derogation of duty.” In other words, board members shouldn’t jump ship during the company’s moment of greatest need.
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What Do Boards Do for Board Member Training?

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Serving on a board of directors means a lot of learning on the go, but that doesn’t mean there aren’t resources for boards that want to improve.

Whether they’re sought out individually or as a team, board member training options can provide directors with even more specialization and confidence in their leadership abilities.

If you’re a first time board member, look for guidance

Being a first time board member can be an intimidating experience. You’re learning the ins and outs of corporate governance as well as the basics of parliamentary procedure all while guiding an organization. Walking into a director’s role without any formal training isn’t impossible, but it’s not an easy task either. Whether you’re joining a local nonprofit board or the board for a large corporation, there are tools that can help you become better prepared.

For nonprofit members, you can easily find free online training courses like the ones at nonprofitready.org. For-profit board members can attend in-person training events with outstanding organizations like the National Association for Corporate Directors, which offers a 3-day course specifically for new directors.
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Directorpoint Gets a New Look!

screen-shot-2017-06-06-at-3-38-02-pmAt Directorpoint, we’re dedicated to providing boards with a software product that will change the way they make decisions for the better. Every day, our hardworking staff strives to give our clients the best experience possible—whether it’s using our intuitive software or receiving support from our outstanding customer service team. We believe part of that great experience also means interacting with an attractive and forward-thinking brand.

That’s why we’ve decided to freshen up the look of the Directorpoint identity!

Don’t worry, though. This doesn’t mean that your familiarity with Directorpoint’s product will change. We’re simply updating our logo and website to ensure that the look and feel of Directorpoint reflects our focus on the future. You’ll still be logging into a product that’s ease-of-use is unparalleled.

In the coming days, Directorpoint’s communications will look a bit different. We hope that you’ll enjoy the aesthetics of our little makeover. We’re really proud to bring you a better and brighter Directorpoint!