Virtual data rooms (VDRs) are highly secure, cloud-based data repositories that make it easy and safe to upload and share critical information. VDRs are already commonly used to facilitate mergers and acquisitions, due diligence investigations, and fundraising rounds. However, given their utility and affordability, they are increasingly relied upon in a variety of other capacities. Here are five reasons VDRs are particularly useful for board communications.
Board members are busy individuals, and they have to review a lot of information to help guide decision-making. As a result, information presented to them must be clear, concise, and well-organized. Utilizing a VDR for board communications can help companies ensure that important information is uploaded and organized in a manner that allows board members to access and locate items quickly and efficiently. Folders, subfolders, drag and drop features, and a quick search bar are all useful VDR features that simplify organization.
Centralizing vital information in one secure location immediately improves productivity, as there is no longer the need to search for or request items from others. By storing data in an online repository, everyone can access to key documents at any time from anywhere. This remote, customizable access is particularly helpful for board members who must travel frequently or reside out of state. In addition, any modifications to existing data are updated in real time, so there will no longer be issues with relying on outdated or multiple versions of the same document.
Regular board meetings are a necessity, although video conferences are becoming increasingly commonplace. Regardless of when and how board members meet and communicate, implementing a VDR for board communications can help streamline the meeting process. For example, members can access and review any data to be discussed prior to meeting, which will help ensure that everyone is on the same page. In addition, a VDR audit trail will show who has or has not reviewed data, so gentle reminders can be sent to ensure everyone is prepared in advance.
Even though board members generally have unfettered access to critical company data, it may be necessary to time the release of certain data or revoke access to some data at specific times. Retaining this level of control is far easier when using a VDR because it allows the administrator to assign users permissions-based access, and institute special viewing restrictions such as read-only or disabled printing. This type of control will prove quite useful if an internal board member needs access to data that an external board member does not need or perhaps should not view.
Perhaps the most significant benefit of implementing a VDR for board communications is that it will ensure that confidential and sensitive data will remain so. Data security is of the utmost importance these days, and companies should only entrust their data to service providers who understand and value the necessity of strong data security measures. Any reputable VDR service will incorporate stringent security standards, such as advanced encryption and two-factor authentication.