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Administration and Governance Challenges Meet Tech Innovation

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February 04, 2020 | Jennifer Namazi

Administration and Governance Challenges Meet Tech Innovation

When a company is growing at lightning’s pace, such growth can bring a need to streamline or expand processes to ensure errors and hiccups are minimized. Sometimes the momentum of expansion can be sink or swim for corporate governance – grow too quickly and risk that the company’s internal ability to meet compliance demands may suffer. It appears that, having experienced significant M&A activity over recent years, was at such a crossroads – sink or swim.

The company was recently recognized in an article by Corporate Secretary (“’s creative use of in-house tools aids governance” – Ben Maiden, Jan. 27, 2020) for their “outstanding” and “transformative” use of technology for their corporate governance, including stock programs. The need for such innovation derived from the acquisition of more than 30 companies over the past five years, nearly all of which resulted in issuances of time based restricted stock to founders and key employees of the acquired companies. Thirty companies in five years – all with restricted stock grants – begins to paint a mind numbing scenario of lots and lots of releases.

With rising concerns about “becoming buried in paperwork and concerned about potential human error in the accompanying manual data entry,” the company’s corporate securities and governance team was tasked with finding “’moon shots’ to keep up with demand.” What they implemented appears to be both innovative and efficient in achieving that goal. According to Corporate Secretary, innovations included the following:

Innovation #1: Built an in-house system from scratch leveraging Salesforce’s own technology to process releases. The system included vesting alerts, and automation of the release process – from generating a participant letter, to automatically sending a legal instruction letter upon release over to the transfer agent.

Innovation #2: Created a “‘community’ cloud destination where employees can go to ask and have their insider-trading questions answered. This may be a favorite innovation from my perspective. Think of taking individual emails from various participants, often asking the same questions, and streamlining those to a Q&A format – answered and updated in real-time – that the entire Salesforce employee population can see. “‘These Q&As are searchable, encourage employee self-help, decrease the amount of time the team spends answering questions and reduce employee confusion around insider-trading matters,’ the company says.”

Innovation #3: Moved away from “the process of alerting all employees of trading-window openings and closings via mass emails from the general counsel. The general counsel received many questions from employees, and responding to all of them was an inefficient use of time. The solution was to use Salesforce’s marketing cloud to create personalized email notifications with relevant links and to create an email alias that routes questions directly to the team that is best able to handle them.”
Innovation #4: Improved the process of collecting D&O questionnaires from officers and directors. Moving away from paper, Salesforce leveraged the online offering from a service provider. The benefits appeared to be immediate, with the first questionnaire being completed within an hour. Anyone remember chasing directors or officers for weeks to get those paper forms returned?

While Salesforce was able to leverage much of their own technology (and some external) to fuel their innovative solutions, there are takeaways for any company looking to improve their processes. For one thing, great solutions can come from thinking outside the box. In the case of Salesforce, it appeared that the directive to pursue “moon shots” allowed creativity to flow, leading to solutions that have been described as “outstanding”. What moon shots can we take in solving our own unique stock plan and/or governance needs?

Additionally, there appears to have been much cross-collaboration between internal stakeholders in pursuing improvements. The General Counsel was overloaded with inquiries, the Stock Plan Administrator was overloaded with restricted stock releases. The resulting enhancements appear to have served a number of corporate governance purposes and functions. Stepping out of the silo and into a collaborative process could make a difference in identifying potential improvement opportunities and getting everyone on board to make them happen.

While not every company may be on an M&A growth trajectory, Salesforce’s story can still serve as a model for what’s possible when oncoming administration and governance challenges – whatever they may be - are met with innovation.


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