Q: We have many board committees and subsidiary companies with varying degrees of overlap amongst directors; how can we address this segregation of information and duties with a board portal?

A: Access to the right content at the right time is key to effective board processes. A big part of board communication is about who sees what and when they see it. A board portal can be used effectively to target content to one set of users, say a particular subsidiary company, while simultaneously restricting access to a second set, perhaps if a conflict of interest arises. This is a matter of control and if you’re in a paper process, you have that control. It may be inefficient and slow, but it works. Understandably, companies want assurance that they won’t lose that control when moving to a board portal. If we expect customers to go paperless, online control has to reasonably replicate paper control. This is done through:

  • a ‘control matrix’ that can produce an online equivalence to paper
  • content segregation for overlapping board structures, and
  • self-sufficiency for real-time responsiveness and administrative efficiency.

Control matrix

The control matrix maps all users against all assets. It lets us capture the process distinctions and nuances of paper. It doesn’t matter if that’s a document, message, discussion post, or anything else for that matter. For example, today you might print and assemble multiple versions of the boardbook and then send unique versions to the different recipients. A board portal handles this process, not by constructing multiple versions, but by creating a single version that aggregates all the content. Then, with the control matrix, particular sections of the book are blacked out depending on the viewing rights of the recipient. As part of the paper process, you might also print a preliminary copy of the boardbook for gathering the chairman’s feedback. With a board portal you do that by temporarily screening out the rest of the board until the chair approves it electronically, at which time you grant viewing rights to the full board, cutting the review cycle time dramatically.

Content segregation

It’s not just boards that long for a combination of online access and control over their content. So do fund trustees, subsidiary boards and leadership teams in a wide range of industries. In these scenarios, we often encounter overlapping board structures. It’s for that purpose that a multi-board architecture exists which segregates content between portals, effectively creating communication focal points. It lets directors switch back and forth between different portals seamlessly. Each one is configurable with its own functionality and customisable with branding that corresponds to the board’s identity.


The creation and distribution of paper boardbooks is a notorious time sink. Depending on scope, the process can occupy a staff of several administrators for well over a week, sometimes longer. Capturing this process online reduces this time commitment from weeks to days, or from days to hours – an order of magnitude improvement. From a director’s perspective, instead of having to wait for the arrival of the overnight shipment, the boardbook is available within minutes. It can even be ‘pushed’ to the director’s ‘briefcase’ so it’s simultaneously available offline, without any action on the director’s part. This results in a scale improvement in responsiveness, in this case from hours to minutes, which is particularly useful in the event of last-minute changes.

A board portal enables the company secretary to manage board support with a short learning curve. This process involves editing documents in native form, then saving them directly into the online repository’s folder tree structure. A similar approach exists for systems administration. Users may be added or removed on short notice when, for example, a new director joins, a lawyer is added into the review process, or an entire new work space needs to be formed to collaborate around a special project. In these circumstances the administrator has the self-sufficiency to make any changes without assistance from IT or third parties.

Erin Ruck, Regional Director BoardVantage
Tel: 2108 4600 eruck@boardvantage.com www.boardvantage.com


Q: Is there any update about the latest developments on FATCA?

A: The Foreign Account Tax Compliance Act (FATCA) is a piece of US tax legislation designed to track US nationals who may be avoiding tax liabilities by holding assets overseas. It requires foreign financial institutions (FFIs) to report information directly to the US Inland Revenue Service (IRS) about financial accounts held by US taxpayers, or held by foreign entities in which US taxpayers hold a substantial ownership interest. FATCA took effect on 1 July 2014. Further to our Ask the Expert column about FATCA last September (see CSj, September 2013, at: http:// csj.hkcgi.org.hk) we cover the latest developments for sharing.

On 31 December 2013, Hong Kong Securities Clearing Company Ltd issued a circular advising, among other things, that it would review and consider whether it may be necessary to make any rule changes to require FATCA compliance by CCASS participants who are FFIs and alert the participants of the potential withholding tax on US source payments.

On 21 March 2014, the Securities and Futures Commission (SFC) issued a circular to remind issuers to critically assess the potential implications of FATCA on their business operations and to ensure their offering documents provide FATCA information and risk disclosures. If an SFC-authorised investment product is likely to be subject to the withholding tax under FATCA, the SFC expects issuers to provide at least one month’s prior written notice to investors stating the potential impact.

On 9 May 2014, the HKSAR government issued a press release stating that it had substantially concluded discussions with the US government on a ‘Model 2 Intergovernmental Agreement’ (IGA). Financial institutions were reminded to assess the relevant FATCA compliance implications for their operations and clientele. The government also published an FAQ to explain more about FATCA and the IGA.

If you are an FFI, you need to appoint a ‘Responsible Officer’ and register with the IRS to get a ‘Global Intermediary Identification Number’. The determination of whether your company is impacted by FATCA is complex. You should consult your tax adviser to determine if your company is affected by FATCA and, if it is, ask your share registrar or other agents to help in the collection of information for reporting to the IRS.

Candy Wong, Vice-President of Client Services Computershare Hong Kong Investor Services Ltd candy.wong@computershare.com.hk www.computershare.com


SIDEBAR: Online resources

The online resources mentioned in this article are available on the following websites:

  • the Hong Kong Securities Clearing Company circular

    (www.hkex.com.hk – see Market Operations/ Participant and Member Circulars/ Hong Kong Securities Clearing Company Ltd)

  • the Securities and Futures Commission circular

    (www.sfc.hk – see ‘Regulatory Information/ Circulars’ in the banner at the bottom of the home page)

  • the HKSAR government frequently asked questions