Electronic Transactions

COVID-19 has fast tracked a new way of conducting business with a much greater reliance on electronic decision making and transacting. In this new world of work, there are some practices that have been adopted that can be subject to challenge where the digital controls are not as tight as they might be. We take a look at two situations in this blog post; round-robin decision making and electronic signing of documents.

Email is the most common medium for round-robin decision making but it comes with two main weaknesses:

• The email messages and the information shared are often not secured with full end-to-end encryption. This becomes problematic when dealing with the privacy laws that are becoming more prevalent around the world; and
• The email thread supporting the decision making is often not stored in a manner where it can be easily interrogated by the body that is ultimately responsible for the decision taken. This is especially the case where some of the individuals were not party to the decision such as with the decisions of a sub-committee.

A platform that supports end-to-end encryption and the ability to store the discussion as a reference for other parties would improve the digital environment and allow one to move the sensitive information off email.

Electronic signatures are acceptable in most jurisdictions for most transactions. Transactions that would typically still require ‘wet’ signatures are wills, court orders, property transactions, marriage and divorce agreements. When relying on an electronic signature, it is still, however, important to ensure that the means of collecting the signature can:

• Identify the person signing and the date and time that the signing took place;
• Show that the person has the intent to sign the document;
• Make it clear that the person consents to the use of an electronic signature;
• Identify that an electronic and not a ‘wet’ signature was used; and
• Ensure that the document that was signed can be kept secure from tampering.

A practice for capturing electronic signatures that has developed in this new world of work is one where the document is printed, signed and scanned. This practice comes with several weaknesses:

• Where email is used to deliver the documents, the same weaknesses as shown above for round-robin decisions apply;
• Also, there ends up being two version of the document, one with a ‘wet’ signature and the other with the scanned electronic signature. The use of an electronic signature and therefore which document constitutes the original is often not clear; and
• Proof of intent by the person signing is often not captured or stored.

A platform that provides an effective record of the request to sign a document and the response by the person signing and preserves the integrity of the document that was electronically signed would improve the governance around electronic signatures.

By integrating the two processes of electronic discussion and signing, SC Spheres offers a holistic governance solution for this new world of work. This is especially the case when one considers that the SC Spheres platform also integrates solutions for board papers and a document repository.