Board Reports

Board Reports

A company’s board of directors is collectively responsible for leading and directing its affairs in order to promote its success. To fulfill this role, the entire board must be well informed about current and likely future performance.

This information is routinely communicated through the Board Report, which is typically a paper or electronic document circulated to directors before each board meeting.

The format and content of a company’s Board Report tends to follow the personal preferences of the CFO, CEO or Chairman. Requests for additional schedules and analyses from time to time often result in the report growing ever larger, frequently becoming an unwieldy and indigestible document that lacks a clear structure and focus on the future.

What makes a good board report

1. Provide a clear structure
A Board Report needs a strong, logical structure that is easy to navigate so directors can rapidly find their way around the information and discuss its implications effectively.

2. Get the right balance of metrics
The Board Report should include performance metrics that are most relevant to the achievement of the organisation’s success. Outcome measures of performance (typically financial) should be balanced with leading indicators, which are usually non-financial (e.g. market share, demand, sales pipeline, staff attrition).

3. Answer key questions
Each page in the Board Report should anticipate and answer a key question that directors should be asking as they probe and challenge the information reported.

4. Provide a clear analysis of the issues
The Board Report should clearly identify issues, risks and actions. Even the most financially literate Non Executive Director should not be expected to have to pore over the reported data in the limited time available before each board meeting to identify the salient points for discussion.

5. Get the right balance of tables, graphs and commentary
The design of the Board Report should be engaging, with tables, graphs and commentary arranged on the page or screen to tell a story.

6. Focus on the future
The Board Report should provide credible forward-looking information, focused on whether the firm is on track to meet its forecasts for the financial year and provide early identification of potential bad news or opportunities ahead.

7. Include a “topic of the month”
To avoid the Board Report becoming too long but enable the coverage of a broad range of subject matter during the year, include a “topic of the month” that changes focus each month. This might include an analysis of specific competitors, products or customer groups, or focus on particular change programmes.

8. Enable directors to explore the report interactively
No single fixed report can comprehensively answer every supplementary question that a director might raise. Technology can enable Board Reports to be accessed in an interactive, screen-based format via a PC or tablet.

The purpose of board reports

There is a reason for everything that the board does, including writing, reading, and storing board and committee reports. The committees take on work that the board cannot do during a regular board meeting. It’s important for committee members to communicate their work to the other board members.

Committees are usually formed by taking selecting board members, and sometimes other members, that have the talents needed to fulfill the objective of the committee. Committees can spread their work over weeks or months so that they can fully research their objectives and make comprehensive recommendations to the full board.

For the most part committee reports are intended to be a communication tool. The board can decide how often the committee submits a report, which can be monthly, yearly, or some other timeframe.

The kind of committees that write reports

There are usually three standing committees:

  1. Executive committee
  2. Finance committee
  3. Board development committee

There may also be other standing committees or ad hoc committees. Standing committees meet on a regular basis. Ad hoc committees meet with the goal of having an objective and reporting it to the board.

Standing committees submit reports at every board meeting. It’s important for boards to hear a summary from the Executive Director.

The executive committee generally acts as a steering committee to guide the work that the board discusses at a board meeting.

One of the most important documents that the board members read is the financial report. Board members should learn how to read the financial reports. More importantly, they should give input about the budget and ask questions about expenditures and trends.

The Board Development Committee is responsible for recruiting new board members and bringing a slate of candidates to the board at election time. They also look for ways to train and mentor current board members. Some boards may give this committee responsibility for fundraising. A Board Development committee report communicates their work to the other board members.

The Purpose of Board Reports

Board committees write formal reports to the board so that they have an opportunity to learn about the work that the committee has been doing. Committee reports become part of the minutes and should be kept for historical and recording value.

Committee reports could also be called upon at any time if a legal issue arises, which makes it ultra-important for committees to document their findings in writing. Take a look at these reasons that committees write reports to the board.

  1. Bring the Board Up to Speed

Committee reports bring the board up to speed on the work that the committee has been doing since the last report. It gives the board the chance to give input and ask questions. All board members have responsibilities to be active participants even when they are not participating on a board.

  • Give Board Members a Sense of Pride and Enthusiasm

When committee reports are read, it creates a spirit of accomplishment and enthusiasm among the board members. Committee reports can be a useful tool for helping to keep a board united.

  • To Remind Board Members of the Commitments They Made

If a board created a committee and gave them an objective, they have to recognize the importance of the work that the committee is doing.

  • To Spark Discussions and Questions from the Board

Even though the remaining board members are not participating on the committee, they need to show an active and vested interest in the work the committee performs. Committee reports should form the basis for a discussion. Committee members should be prepared to answer questions and take the board’s concerns back to the committee.

  • To Give the Board Members Information for Marketing Purposes

The board should be aware of all of the activities of the committees. Having lots of information to share with their personal or professional networks will spark enthusiasm for the organization and its goals.

What Goes Into a Report for the Board of Directors?

Each report will be as unique as the committee that prepares it. Following is a list of elements that could be uses as a template for a report to the board.

  • Date
  • Name of committee
  • Name of committee chair
  • Names of committee members
  • The objective of the committee
  • Summary of recent accomplishments and current activities
  • List of activities in progress and upcoming events
  • Financial impact
  • Dissenting opinions
  • Recommendations to the executive director or CEO
  • Recommendations to the Board of Directors

When writing board reports, remember that the purpose is to communicate committee updates to the board. When committee members offer reports with enthusiasm, the rest of the board will receive the information with enthusiasm. Learning about progress that the organization is making keeps the entire board on track towards their goals.

Board Report Structure

The board report should follow an easy to read format. Some reports will be shorter than others. For example, a monthly update regarding a department’s development process may not be as detailed or lengthy as the annual summary of the entire project.

While shorter reports might look more like a memo with key headers and bullets outlining key performance indicators (KPIs), lengthier reports will look more like an academic report, with a cover page and table of contents.

Regardless of the report’s length, make sure that the first part of the report states where the report is coming from, the time frame that report covers, and who the report is going to. Title the report in a way that says what the report discusses, so that readers can quickly file it and relocate it if needed. For example, “Annual Sales Reports Based On Territories,” clearly states what the readers will discover in the report.

Use headers and bullets within the reports, so as to enable board members to scan through the topics and find the relevant information. Remember that reports are used to get action from the board, so that these reports can update board members on a project they are already monitoring. There should be an introduction and a summary section, to give the board an overview of the information within the report.

Double-check the report to make sure that formatting, grammar and spelling are correct. You want the board to trust the information given to them. Reports littered with errors leave board members questioning the detail and the professionalism of the person presenting the reports.

Content of the Board Report

Before you write the report, think about the report’s objective. Compile information and data that is pertinent to the objective. For example, if you are updating the board on a new rollout of a software program, you should gather pertinent details about which milestones have been accomplished, what the next stages will do and the timelines involved.

It would also be wise to note any issues that have arisen or that your project, based on the progress so far. If the project is ahead of schedule, be sure to note how and why so as to keep the board members enthusiastic. If progress is slower than expected, be clear and concise as to why. Don’t hide the information. The board is there to help provide solutions; if you don’t explain the problem, the solutions are harder to find.

Be succinct in your descriptions. If you can say something in one sentence, there is no need to write an entire paragraph. If you are referencing outside studies, news, or previous reports, note the reference and summarize the content.

Then, have the referenced material available, if anyone wants more information This keeps the report concise, without omitting any information, if board members want any additional information.

Responsibilities of the Parties

Although the committee executives or managing directors are responsible for creating reports, both the board of directors and managers must work together.

If the board is getting reports without the information that’s required to make informed decisions, the board must develop a board report template for managers to follow. By standardizing the reports for the organization, everyone is on the same page, regarding the flow of information.

This procedure helps to process information. When all reports are formatted the same way, the board knows what to expect with each report. Additionally, when the board sets specific questions and necessary information in each report, that eliminates guesswork, that stems from managers writing the report.

Everyone starts to track the right data and then reports on it in a way that helps the organization process information faster and to make decisions with more confidence.

Example of An Annual Board Committee Report

Instead of asking board committees for monthly written reports or having only verbal reports at board meetings, consider asking committee chairs to write an “Annual Report” at the end of each year describing their committees’ activities and decisions. These reports can be included with the board minutes in the organization’s formal, permanent records.

Committee: ________________________________

Period of time this report covers: ________________________________

Committee chair: ________________________________

Committee members: ___________________________________________

The main objectives for the Committee: ____________________________

___________________________________________________________

Summary of recent accomplishments and current activities:

List of activities in progress and upcoming events/discussions:

Recommendations to the Executive Director/CEO:

Recommendations to the Board of Directors:

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