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A guide to better board reporting

25 July 2018 by Chris Hodge

A guide to better board reporting

New guidance to refine the flow of information to the board and transform decision making

In the February edition of Governance and Compliance, I reported on research by ICSA: The Governance Institute and Board Intelligence into the effectiveness of board reporting. That research, which included the results of a survey of ICSA members, found there was widespread dissatisfaction with both the quantity and quality of board packs – they were too long and very often they were not focused on the issues or information that really mattered.

In light of this, and to help governance professionals ensure that their board papers, and the processes that are associated with them, are effective and efficient, we set out to develop three new resources:

  • A cost calculator to enable organisations to quantify how much time and money they spend on producing this information
  • A self-assessment tool that organisations could use to assess the effectiveness of their board packs and identify whether there might be room for improvement
  • Guidance to help governance professionals and those who commission and prepare papers to address some of the challenges identified by this research

At the end of the article I invited anyone who was willing to help to drop me a line. The response was phenomenal.

Some of you provided or sense checked the data on which the cost calculator was built, while others shared examples of how they have tackled the challenges associated with producing targeted and timely board packs. Many thanks to all of you who took the time to contribute, we really could not have done it without you.

Assessing the cost

The cost calculator was launched in May, and it seems many of you have been making good use of it already. Earlier this month, we launched the self-assessment tool and guidance at the annual conference in London.

I am not going to give too much detail on the cost calculator or self-assessment tool here – far better that you try them out yourself. They are both simple to use and, once you have completed them, will generate some tailored feedback.

“A paper can be beautifully written, but if it full of irrelevant or unhelpful information, then it is of little value”

In the case of the self-assessment tool, you can also download a version if you wish to share it with your board or management to get their perspective on whether your board packs are hitting the mark.

The cost calculator and self-assessment tool can both be accessed via the ICSA website, where you can also download a copy of the new guidance.

A common challenge

It was clear from our research that producing good quality board papers in an efficient way is something that is a challenge for organisations of all sectors and sizes and this was reinforced by your responses. We were contacted by members in listed and private companies, from the voluntary, health and education sectors, and from as far afield as Kenya and the Caribbean.

However, while the challenges might be the same for all organisations, the solutions will not be. It would have been impractical – and probably impossible – to produce guidance that covered all eventualities. Instead, we have tried to identify the factors that organisations should consider and questions they ought to ask themselves. We have illustrated these with some of the helpful tips we received from members.

Twelve questions to ask

  1. Is the board clear about how it wishes to divide its time between strategy, operational performance and governance and compliance matters?
  2. Is the board clear about which decisions it needs to take and the criteria for determining when other matters are significant enough to be brought to their attention?
  3. Do the forward meeting plan and individual agendas reflect the board’s priorities?
  4. Are responsibilities for commissioning, writing, reviewing and collating the board pack clear?
  5. Are authors properly briefed on why the board wants the paper, what information it needs and how it should be presented?
  6. Do the agenda and individual papers make clear what action or input is needed from the board?
  7. Do papers set out all the relevant considerations and implications of which the board should be aware?
  8. Do you have or need standard formats for different types of board papers?
  9. Is training and support available to authors?
  10. Is the board pack easy to navigate and readily accessible for board members?
  11. Are the methods by which the board pack is stored and distributed secure?
  12. Does the board give feedback on the clarity and usefulness of the papers it receives?

Four stages

The guidance consists of four sections, each of which deals with one of the main stages in the development of a board pack: identifying the information the board needs, commissioning board papers, writing board papers, and collating and distributing the board pack.

The issues and activities described in each section are all interdependent – for example, a paper can be beautifully written, but if it full of irrelevant or unhelpful information because the board was unclear about what it wanted or because the author was not given a clear briefing, then it is of little value.

When planning the board pack, it is important therefore to think about all the different stages.

Identifying the information

It is essential that there is clarity about what information the board needs, why and when.

This does not apply only to individual papers, or even individual members, but to how the board spends its time overall.

“It is essential that there is clarity about what information the board needs, why and when”

Boards often complain that they spend too much time on compliance at the expense of strategy and performance; but while regulatory requirements certainly constrain them to an extent, they still have the ability – and responsibility – to set their own agenda and manage their own time.

Once the board has set its priorities, identifying and agreeing on the information it needs has to be an iterative process between board and management. Neither board members nor those who advise them are clairvoyant. Boards may not be familiar with all the considerations that are relevant to addressing those priorities, or aware of emerging issues.

Conversely, the executive will often have a lot of data at its disposal but may not be able to anticipate what specific information the board wants to have, which might result in it sharing either too much or too little.

The board’s priorities will inevitably change over time and sometimes even from meeting to meeting. Advance agenda planning and developing clear and agreed formats for board papers that bring out the most important issues can help to anticipate many challenges, but neither of those should been seen as a one-off exercise. Regular reviews are desirable to ensure board packs continue to serve their purpose.

Commissioning papers

Careful planning is essential to the effectiveness of any board meeting. This starts with the agenda – identifying and agreeing the essential business that must be carried out at the meeting; ensuring that sufficient time is allowed for discussion of the most important issues; and striking a balance between the board’s different responsibilities.

It is important that the authors of individual papers understand clearly what they are being asked to advise the board on and why; that adequate time is allowed for papers to be written and, where necessary, recommendations to the board to be agreed; and that time is allowed for the board pack as a whole to be reviewed for clarity and balance before being sent to the board.

Writing papers

Board agendas will typically cover a wide variety of issues and non-executive and voluntary members in particular will usually have a limited amount of time in which to prepare for meetings and may often have little prior knowledge of the matter they are being asked to consider.

It is therefore essential that the papers on which board members rely are clearly presented and written, so that they do not need to waste their limited time trying to work out what they are being asked to do or searching through long and dense documents looking for the nuggets they need to know.

Clear and consistent formatting of papers can help considerably, as it means board members know where to look when presented with a new subject.

The style in which papers are written can also make a big difference, and training can help with that. Even so, for each individual paper authors and sponsors will need to make judgements about what information is essential and what is not, and how to ensure that the paper is succinct but also sufficient for the board’s needs.

Collating and distributing

Board members need to receive their papers early enough to allow them to read and reflect on the contents. The pack as a whole needs to be clearly presented and signposted, just as individual papers do; and board members will want to be able to access the papers at a time and by a means that fits with their own schedule. The manner in which the board pack is collated and distributed can therefore be either a help or a hindrance to the board.

Information security is also an essential consideration, all the more so since GDPR. Board papers are often full of highly sensitive commercial or personal data. They are being distributed to people who are often operating outside the organisation’s normal control systems and can all too easily go astray if insufficient care in taken.

Not the end of the road

The great response from ICSA members to our request for assistance with these new tools has really paid dividends and I am going to ask for your help one more time.

When you have had an opportunity to use the cost calculator or self-assessment tool, or to read the guidance, please drop us a line at betterboardpacks@icsa.org.uk and let us know what you think, how we can improve them, and if there is any other practical assistance we can provide.

Effective board reporting

Download our new guidance or try the cost calculator and assessment tool.  

Chris Hodge is policy advisor at ICSA: The Governance Institute

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