Diligent Corporation, known as Diligent, is a
software as a service
Software as a service (SaaS ) is a software licensing and delivery model in which software is licensed on a subscription basis and is centrally hosted. SaaS is also known as "on-demand software" and Web-based/Web-hosted software.
SaaS is con ...
company that enables board members of corporations, government organisations, and not-for-profit groups to share and collaborate information for board meetings. Headquartered in
New York City
New York, often called New York City or NYC, is the most populous city in the United States. With a 2020 population of 8,804,190 distributed over , New York City is also the most densely populated major city in the Un ...
, and incorporated in tax haven Delaware, the company has offices in
Galway
Galway ( ; ga, Gaillimh, ) is a city in the West of Ireland, in the province of Connacht, which is the county town of County Galway. It lies on the River Corrib between Lough Corrib and Galway Bay, and is the sixth most populous city on ...
, Ireland;
London
London is the capital and List of urban areas in the United Kingdom, largest city of England and the United Kingdom, with a population of just under 9 million. It stands on the River Thames in south-east England at the head of a estuary dow ...
, UK; Washington, D.C.; Munich, Germany; Budapest, Hungary; Hong Kong;India and China.
The company's main products are based on a software as a service model and sold by subscription. These include corporate governance technologies, such as a board portal for messaging, and voting tools for board directors and executives. Diligent's products are used by 40 percent of all Fortune 1000 companies.
History
Early history
Diligent was founded by Brian Henry and Kiri Borg in 1994 as Manhattan Creative Partners (MCP).
In 1998,
SunAmerica became a client of Manhattan Creative Partners after SunAmerica director Peter Harbeck and Brian Henry discovered a joint passion as airplane owners and recreational pilots. In 1999, Alessandro Sodi was hired and trained by Henry and Borg to assist in account management. Eventually, Henry turned over the day-to-day management of the SunAmerica account to Sodi.
In 2000, when SunAmerica expressed their desire to do away with their burdensome hard-copy corporate board paper books, Henry conceived of and hand-drew the design for the original and first web-based "Boardbook." Marco Morsella, the first employee hired by Henry and Borg in 1997 to be MCP's graphic designer, created a digital GUI based on Henry's design. SunAmerica became the first company to license the new, web-based Boardbook. Henry and Borg, and later the Diligent Partners, recognized the value of this innovative technology and invested most of the profits from other consultancy projects into the continuing development of the new software product.
New company
In 2003, Henry and Borg formed Diligent Partners, together with Sharon Daniels, Dan Kiley, Kenneth Carroll, Alessandro Sodi, Marc Daniels and Robert Craig.
Henry was named CEO of the new entity, Sodi, President, and Carroll, chairman. At the same time, the company renamed MCP to Diligent Board Member Services "to reflect the firm's shift of focus to corporate governance service delivery."
By 2006, Diligent had expanded to Europe, Canada, and the UK.
Initial public offering
Diligent listed on the New Zealand Exchange (NZX) in 2007 with a $24m NZX IPO, valuing the company at $115m. While fundraising for the company was successful, prior to the company listing some information became public regarding bankruptcies of original founder and CEO Brian Henry and his brother Gerald Henry. These bankruptcies occurred in the late 1980s due to the 1987 share market crash. Gerald Henry was given jail term for fraud in 1991 due to a subset of US law.
Diligent released a statement clarifying that Gerald Henry was not associated with the company.
The day following Diligent's listing, the company announced Henry's resignation as CEO due to the oversight of the disclosure of this information. However, some journalists at the time claimed that Diligent's PR firm and attorneys "should have advised Henry to publicly acknowledge his history."
In fact, Diligent's IPO attorney, Mark Russell, said his firm, Buddle Findlay, "was proud to have our brand associated with Diligent and with Brian in particular. We have no concerns whatsoever."
It was reported that "Diligent's promoters and directors, including director Mark Russell of law firm Buddle Findlay, knew of Brian's connection with Energycorp, but decided not to disclose. Coincidentally, Russell, in the 1980s worked for the Bank of New Zealand, which had lent the company $15.5m on a handshake."
Henry was replaced by Alessandro Sodi, who was then President. Henry remained on the Board, his value to the company recognised by the other members of the board. Diligent's share price collapsed to $0.14 by March 2009 but later recovered to lead the pack of technology listings.
Company growth and revenue restatement issues
With the release of the
Apple iPad
An apple is an edible fruit produced by an apple tree (''Malus domestica''). Apple trees are cultivated worldwide and are the most widely grown species in the genus ''Malus''. The tree originated in Central Asia, where its wild ancestor, ...
in 2010, Diligent developed an app for this new platform and commenced a period of explosive growth in client numbers. Diligent made its first operating profit in 2012. Between 2011 and 2012, company revenue grew by 165%. By mid-2013, the Diligent stock price had reached over $8.00 NZD a share.
In August 2013, Diligent announced that it would need to restate revenue for the current and preceding three years due to discrepancies in company accounting practices. No fraud was involved, though the company was required to recognize revenue from the date of a contract being signed rather than the start of a month, and its installation fees recognized over a longer period of time. The company also acknowledged that its accounting systems were underdeveloped and required improvement. It was fined by the NZX for a number of minor breaches of listing rules.
Alessandro Sodi stepped down as CEO 2015 to focus on the launch of Diligent Teams as Chief Product Strategy Officer. Sodi was succeeded by current CEO
Brian Stafford
Brian Stafford is an Irish former Gaelic footballer. He played for the Meath county team in the 1980s and early 1990s under the management of Sean Boylan. For Meath he usually played at full forward. He played club football for Kilmainhamwo ...
, an ex-Mckinsey partner and software-as-a-service specialist.
Return to private ownership
On 14 February 2016, Diligent announced that it had entered into a definitive agreement to be acquired by Insight Partners for consideration of $4.90 per share, valuing the company at $624M USD, subject to approval from the shareholders. A Shareholder meeting was held in Auckland, NZ on 13 April 2016 and having received 57% votes in favor of the Merger (as it was structured), Diligent de-listed from the NZX and returned into private hands.
The merger was opposed by the NZ Shareholders Association who considered the offer too low, stating that "current offer is low compared to where the company's prospects have been in the past"
Since 2016, Diligent has restructured its leadership team and acquired new companies, including Brainloop, BoardPad, Boardroom Resources and Manzama.
In December 2018, Diligent announced the launch of the Diligent Institute, a think tank aiming to provide customers with global research on governance practices.
Modern Leadership Initiative
In June 2020, Diligent launched its Modern Leadership Initiative and partnered with more than 20
private equity
In the field of finance, the term private equity (PE) refers to investment funds, usually limited partnerships (LP), which buy and restructure financially weak companies that produce goods and provide services. A private-equity fund is both a t ...
companies to improve board-level diversity. Each private equity firm agreed to open board seats of five of their portfolio companies to racially diverse candidates. The private equity firms included
Insight Partners
Insight Partners (previously Insight Venture Partners) is an American venture capital and private equity firm based in New York City. The firm invests in growth-stage technology, software and Internet businesses.
History
Insight Partners was fo ...
,
Vista Equity Partners
Vista Equity Partners is an American investment firm focused on financing and forwarding software, data, and technology-enabled startup businesses. Vista has invested in hundreds of companies, including Misys, Ping Identity, and Marketo.
The ...
,
Hellman & Friedman
Hellman & Friedman LLC (H&F) is an American private equity firm, founded in 1984 by Warren Hellman and Tully Friedman, that makes investments primarily through leveraged buyouts as well as growth capital investments. H&F has focused its efforts ...
,
Hg,
Genstar Capital
Genstar Capital is a private equity firm that executes leveraged buyout transactions in middle-market companies based in North America. Founded in 1988, Genstar currently has approximately $33 billion in assets under management.
Based in San ...
,
The Jordan Company
The Jordan Company (TJC) is a private equity firm focused on leveraged buyout and management buyout investments in smaller middle-market companies across a range of industries.
The firm, which is based in New York City, was founded in 1982. ...
, and
TA Associates
TA Associates, founded in 1968, is one of the early modern-era private equity firms in the United States. The firm leads buyouts and minority recapitalizations of profitable growth companies. TA invests across five industry groups: technology, hea ...
, and also New Mountain Capital,
Francisco Partners
Francisco Partners is an American private equity firm focused exclusively on investments in technology and technology-enabled services businesses. Founded in August 1999 and based in San Francisco with offices in London and New York City, Francis ...
,
Heidrick & Struggles
Heidrick & Struggles International Incorporated is an international executive search firm headquartered in Chicago, Illinois, United States. The firm also has a consulting practice focused on leadership and shaping corporate culture.
History
...
,
Egon Zehnder
Egon Zehnder is a global management consulting and executive search firm. Egon Zehnder is the world's largest privately held executive search firm and the third largest executive search and talent strategy firm globallywith an annual revenue of ...
, and the
American Investment Council
The American Investment Council (AIC), formerly the Private Equity Growth Capital Council (PEGCC), is a lobbying, advocacy, and research organization based in Washington, D.C., that was launched by a consortium of private equity firms in Februar ...
.
Corporate affairs
Leadership
Diligent is managed by CEO
Brian Stafford
Brian Stafford is an Irish former Gaelic footballer. He played for the Meath county team in the 1980s and early 1990s under the management of Sean Boylan. For Meath he usually played at full forward. He played club football for Kilmainhamwo ...
. Other key executives are:
* Amanda Carty, Chief Marketing Officer
* Avigail Dadone, Chief People Officer
*Lisa Edwards, President and Chief Operating Officer
* Satheesh Ravala, Chief Technology Officer
* Michael Stanton, Chief Financial Officer
* Dan Zitting, Chief Product Officer
* Jack Van Arsdale, General Counsel
Customer and revenue
In 2019, the company reported more than 16,500 customers
and 550,000 individual users from more than 90 countries. In 2018, the company reported revenues exceeding $200 million and in July 2019 crossed $300 million in
annual recurring revenue (ARR).
Products
Diligent's products are based on a software as a service model and sold by subscription. They are joined within the “Governance Cloud” and offer a secure set of corporate governance software. After the
COVID-19 outbreak Diligent in March 2020 started to offer
K–12
K–12, from kindergarten to 12th grade, is an American English expression that indicates the range of years of publicly supported primary and secondary education found in the United States, which is similar to publicly supported school grades ...
public school districts and
mission-based nonprofits free access to its board software.
Awards
Diligent was recognized in the
Deloitte Technology Fast 500 three times, ranking #98 in 2014, #420 in 2016 and #433 in 2020.
In 2018 and 2019, Diligent was named one of
Inc. 5000
''Inc.'' is an American business magazine founded in 1979 and based in New York City. The magazine publishes six issues per year, along with surrounding online and social media content. The magazine also produces several live and virtual events ...
’s Fastest Growing Private Companies in America.
References
{{Reflist
External links
Official websiteDiligent Institute
Financial software companies
Software companies of New Zealand
Software companies established in 1994
Companies listed on the New Zealand Exchange
Software companies based in New York City
Business software companies
As a service