Software seeks efficient way to link boards, firms

No one would put up with their inefficiencies if they were at the bottom of the org
chart instead of at the top. But, until recently, companies were inclined to cut
their corporate boards a lot of slack.

By D.C. Denison, Globe Staff,

If company directors were perpetually playing catch up, flipping through crucial
documents on the flight to the quarterly meeting, that was the price paid for having very
important, very busy executives on your board.

Now, of course, everybody’s hoping corporate boards will help clean things up at the
top by taking a more active interest in issues like CEO compensation, accounting
procedures, and corporate ethics.

One problem: The average corporate board is still a laughably inefficient organization.

A.K. Pradeep hopes to change that with efficiency software aimed squarely at the
directors at the top of the corporate food chain. Pradeep hatched his idea for a board
helper business two years ago, when he was an executive at General Electric.

”Every time I met with a CEO they seemed to be complaining about how the company
board didn’t understand what he or she did,” he recalled.

At the same time, Pradeep noticed the CEOs spent lots of time interacting with board
members. ”Their Palm Pilots were filled with appointments to call or visit board
members,” he said.

Pradeep speculated the tools companies used to communicate with their boards were
partly to blame for the disconnect. ”Most companies were using FedEx, UPS, fax, and
occasional e-mails,” he said. ”It could be the most advanced company on earth, but
when it came to communicating with their board they were in the Stone Age.”

So in January 2000, Pradeep began to develop a software product that attempted to
effectively hook up board members and the companies they were trying to govern. The
basics of the platform, BoardVantage, build on the functionality that’s common to
many of the new corporate ”collaboration” software packages: easy Web access,
threaded discussions, tracking of projects, etc.

Yet BoardVantage http://BoardVantage.com/home.asp had to satisfy some additional requirements. It had to deliver an
unprecedented level of security. Communications among board members are ”the
crown jewels of corporate information,” according to Pradeep. Ease of use was also a
priority. The typical corporate board member skews older and less computer-adept
than the general online population.

After 18 months in development, Pradeep sold his first installation of Boardvantage last
September. He has added 20 more customers, including Franklin Templeton
Investments, Blue Cross/Blue Shield, and Cinergy. Although the price per installation
varies according to the number of users, Pradeep says a typical sale is in the
$100,000 range.

He believes the potential market is significant. Pradeep is targeting companies with
more than $100 million in annual sales, in the United States and abroad; colleges and
universities; and nonprofits with income of more than $20 million a year. The total
number of organizations, all with boards of directors, is more than 75,000.

And there is little doubt that most are reviewing their effectiveness, given the number of
boards that have recently been caught napping.

Other board helpers are in the works. RecordCenter offers a ”corporate governance”
software package. BoardSeat is attempting to chart a more efficient way to select a
board of directors; The Alternative Board, assembles independent boards and
facilitates meetings for companies too small or too busy to manage that process
themselves.

There’s probably room for all these products, and more, given how much is expected
from corporate boards these days.

It’s easy to see how BoardVantage attracted Jay Lorsch, a Harvard Business School
professor who is a well-regarded expert on corporate governance, to its board of
advisers.

”One of the major problems that boards face is lack of accurate and timely
information,” Lorsch said. ”If we’re insisting that boards be more independent, we have
to give them better tools.”

In the current climate of high cynicism about corporate America, Pradeep is an
optimist.

”Many of the mistakes we’ve seen boards make are not the result of bad intentions,”
he said. ”They are the result of a lack of good, timely information.”

”There’s a business in making it easy to do the right thing,” he added confidently.

D.C. Denison can be reached at [email protected].

This story ran on page F2 of the Boston Globe on 7/28/2002.
© Copyright 2002 Globe Newspaper Company.

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