Directors’ & Officers’ (D&O) Questionnaires

Turn complex, paper-based D&O questionnaires into a seamless, digital process.

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What is a D&O Questionnaire?

The D&O questionnaire is distributed to company directors and officers to collect individual data that is required by the Securities and Exchange Commission (SEC), Nasdaq, or other stock exchange and regulatory bodies. This process often begins when a company starts to draft its S-1 registration statement in preparation for an initial public offering (IPO). Much of the data collected in the D&O questionnaire must be initially included in the S-1 and then annually updated in the company’s proxy statement. The disclosures in the D&O questionnaire ensure compliance with laws and provide transparency to shareholders and regulators about potential conflicts of interests, company compensation practices, and the qualifications and independence of directors. The question types often focus on background, employment, business relationships, securities ownership, insider transactions, and compensation. Respondent answers help facilitate accurate disclosures.

Why Do Boards Need to Fill Out D&O Questionnaires?

D&O questionnaires are needed to ensure that the company is able to accurately comply with its proxy disclosure requirements and regulatory oversight obligations. Digitizing D&O questionnaires helps improve the integrity and timeliness of this information gathering process and reduces the risks associated with more traditional distribution methods. Companies can use a third-party platform, like Nasdaq EnGauge, to transform the manual, paper-based D&O questionnaire process into one that is dynamic, intelligent, and data-driven. Plus, digital D&O questionnaires help ensure accuracy in disclosures, promote efficiencies, improve responses, streamline reviews, save time, and lower costs.

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D&O Questionnaire Templates and Tips

When creating a D&O questionnaire template, consider including commonly used question categories, such as:

  • General Background. Gather information from respondents about their general backgrounds, including name, age, address, occupation, and self-identified diversity data.
  • Family Relationships. Assess a respondent’s familial relationships to other directors and officers of the administering company or its subsidiaries.
  • Board Memberships. Disclose any other companies for which a respondent is serving or has served as a director or officer.
  • Legal Proceedings. Identify any bankruptcies, criminal activities, fraud charges, securities violations, or other material legal proceedings associated with respondents.
  • Compensation. Examine all sources of compensation that a respondent has received by the administering company or its subsidiaries over the last year.
  • Transactions. Describe any transactions a respondent has had with the administering company, its subsidiaries, or related parties.
  • Securities Ownership. Determine any equity securities of the administering company or its subsidiaries that are owned by the respondent.
  • FINRA. Discover any relationship of the respondent with the Financial Industry Regulatory Association (FINRA), including membership and transactions.

 

With Nasdaq EnGauge, create D&O questionnaire templates from your company’s template or utilize a questionnaire template from Nasdaq Governance Solutions’ law firm partners. When choosing a third-party, like our Board Engagement team, to assist with D&O questionnaires, consider the following factors:

  • Data Security. Does the platform maintain best-in-class security standards?
  • Experience. Does the provider employ professionals who have experience with the D&O process in an outside counsel and in-house legal environment? Can the team help you make the process easier?
  • Governance. Does the team offer support in setting up the D&O questionnaire and facilitating the response and reporting process?
  • Questionnaire Access. Is it straightforward for respondents to access the D&O questionnaires by direct link, and thus avoiding a cumbersome account and password setup process?
  • User Friendliness. Is the interface easy to navigate? Is it available via mobile and desktop devices?
  • Features. Does the D&O questionnaire platform offer dynamic linking to important reference documents or webpages? Is it easy to review defined terms within the questionnaire? Can you require respondents to answer all questions applicable to them to prevent incomplete submissions?
  • Technical Support. Do respondents have timely phone and email support from a knowledgeable, sophisticated, and friendly team in the event of a question or technical problem?

 

When to Update a D&O Questionnaire

D&O questionnaires are submitted annually to comply with SEC and listing standard requirements. Companies may also choose to update their existing D&O questionnaire templates to meet stakeholder demands for transparency. For example, in the current climate of increased pressure for diversity disclosures, D&O questionnaires may be a useful tool to document self-identified information related to board composition.

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About Digital D&O Questionnaires with Nasdaq Governance Solutions

At Nasdaq Governance Solutions, our Board Engagement team works with boards to turn complex, paper-based D&O questionnaires into a seamless, digital process. Our user-friendly Nasdaq EnGauge™ platform helps alleviate the pain points of the D&O questionnaire process.

Historically, the process for preparing and reviewing D&O questionnaires has been cumbersome and time consuming for administrators and for the directors and officers who need to complete them. Administrators spend weeks preparing customized, versions of D&O questionnaires to send to directors and officers via email or mail. Once directors and officers receive the questionnaires, they often commit hours of their time navigating questions and handwriting their answers. They then mail, scan, or email the completed questionnaires back to the administrator for review. In some cases, directors and officers skip questions or submit incomplete responses. As a result, the administrator’s review process may be complicated and prone to error, which may pose operational, financial, and regulatory risks.

Digitizing D&O questionnaires helps improve the integrity of the process and speeds up the review process. Use of a digital platform, like Nasdaq EnGauge, transforms the manual, paper-based D&O questionnaire process into one that is dynamic, intelligent, and data-driven, and helps ensure accuracy in disclosures, while promoting efficiencies.

Our team works with attorneys, corporate secretaries, and administrators to automate the process of customizing, updating, and managing D&O questionnaires for each director and officer year-over-year. They can streamline the D&O questionnaire process by pre-populating information, tracking changes to that information, and utilizing multi-part and conditional questions, customized tables and response fields, linked documents, and fly-over defined terms. They can also send automated notifications from the Nasdaq EnGauge platform that remind directors and officers to complete their D&O questionnaires in a timely fashion.

Our team helps save directors and officers time by sending them customized, secure links to access and complete their questionnaires from desktop, tablet, and mobile devices at their convenience. Directors and officers can complete questionnaires in nearly half the time of a paper-based process, because they can be prepopulated with information from company records only see questions relevant to their role(s) and other attributes predetermined for them.

Upon completion, each completed questionnaire is immediately available from the Nasdaq EnGauge dashboard. Once all directors and officers have completed the process, a redlined summary report in Microsoft Excel is available. This provides a simple way to review all questions, respondents, and changes in a searchable and sortable document. Report data can be sorted when compiling sub-reports for auditors and related-party transactions, streamlining proxy disclosures, and supporting board composition disclosures.

 

The Nasdaq Governance Solutions platform, Nasdaq EnGauge, is equipped with key features to drive excellence throughout the D&O questionnaire process.

 

Ease and Efficiency

  • Flexibility. Create customized D&O questionnaires or adopt questionnaires from Nasdaq Governance Solutions’ law firm partner, Goodwin Proctor.
  • Accessibility. A digital D&O questionnaire provides easy access for directors and officers, saves time, and reduces costs associated with paper-based deliveries.
  • Automation. Automatically pre-fill D&O questionnaire responses for directors and officers based on the prior year’s responses and easily update any changes to that information. Administrators can also automate reminders and notifications to directors and officers, reducing the time they spend chasing incomplete or lost D&O questionnaires.

 

On-the-Go Availability

  • Save-as-you-go. Save-as-you-go capabilities allow directors and officers to work at their own pace and then go back to their questionnaires and pick up right where they left off.
  • Unique link access. Directors and officers can access D&O questionnaires via their own unique links.
  • Mobile experience. Administrators, directors, and officers can access the form via mobile and desktop, which helps streamline the experience across different devices.

 

A Dynamic Experience

  • Streamlined administration. Administrators can include relevant information directly in the D&O questionnaires, including links to supporting documents, glossary terms, and definitions, so directors and officers have the context they need to answer the questions.
  • Customized experience. D&O questionnaires can be customized for each director and officer. The platform hides irrelevant questions, so directors and officers only see questions relevant to their roles, priorities, and responsibilities. This helps reduce the time administrators spend versioning each questionnaire and create a seamless, frictionless, and more engaging experience for directors and officers.

 

Enhanced Accuracy, Data Integrity, and Security

  • Greater accuracy. Pre-filled data such as director biographies, equity ownership, and committee assignments help ensure D&O questionnaires include accurate and consistent information.
  • Enhanced data integrity. Information is organized in data fields and matched to related sections in the D&O questionnaire, simplifying the review process and improving data management for administrators.
  • Optimized submission process. Directors and officers can only submit D&O questionnaires when they are answered in full, which leads to fewer incomplete D&O questionnaires, less time spent requesting updates from the directors and officers, and overall accelerates the review process.
  • Improved transparency. Automated redlining capabilities allow administrators to easily see what information directors and officers have edited, showing changes to pre-populated information which helps improve transparency.
  • Designed with security in mind. Customer data processed and stored in the Nasdaq EnGauge platform is encrypted in transit with TLS 1.2 and logically segregated. Secure web access also confirms only authorized users can access forms, proprietary data, and documents.
  • Better compliance. Respondent data for D&O questionnaires is automatically populated into a dynamic database integrated with Nasdaq Boardvantage®, a user-friendly board portal. This integration reduces administrative work and makes information easily accessible for legal and corporate governance professionals who spearhead the D&O disclosure process.

 

Discover how Nasdaq EnGauge stacks up against the competition with an in-depth D&O questionnaires feature comparison.

 

Want to see how Nasdaq Governance Solutions can help alleviate pain points in the D&O Questionnaire process? Contact us to request a demo.

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