Whether you’re writing board reports for a meeting or just for the first time, it’s just natural to go with the subject matter. Boards look up to the most up-to-date information on the organization. Seeking board approval only amplifies the need to be prepared.
Before you pour out all the information on the page, remember that you are looking at the mountains of information every month. In a week – often less – they need to read, reflect, analyze and prepare for the meeting. And that’s just for your business; many directors are on numerous boards.
Sometimes it makes all the difference. Here are five things to leave out for better board papers:
If it’s in the board, directors have to read it. It is useful to act with care and diligence. Including a 50-page contract as a ‘nice to have’ sets them up to the fine print – or risk being found if the deal heads south.
What to do
Give them a summary of the key elements of the proposed transaction instead. It should include significant terms and conditions, as well as the dollars and the timing of key milestones. The board usually wants to know about termination clauses, guarantees and indemnities, precedent and subsequent conditions, and potential risks associated with the other party. This will enable the board to approve the key terms and to delegate.
Directors do not live and breathe the organization every day. From one meeting to the next, they have other commitments, board and committee meetings, and volumes of reading to get through. What may be commonplace language in your industry is often less familiar to non-executive directors.
What to do
First, make it easy for directors by explaining what technical terms mean, either as you go or in a glossary. Online board packs can mate hyperlinks to definitions or explanations in a separate section. Second, minimize the use of acronyms while possible. Anything more unusual than you’d see in a business newspaper should be spelled out the first time it’s used. Finally, use plain English while possible – keep your reports free from ‘business buzzwords’.
Give directors a glossy document, complete with photos and infographics, that’s all ready for sign-off and they might be impressed – but they’re more likely to be put out. If it’s big enough to need board approval, directors expect to have input. Involve them in advance on key messages and drafts, or face their ire at the presumption that they’ll rubber-stamp the final version.
What to do
If directors have not seen the content before, bring them a simple Word document for review. Once their feedback has been heard and incorporated, bring the close-to-final designed version to the next meeting, or circulate it in advance. Content that’s significant or contentious may warrant advance discussion with the chair or other interested directors on its key messages.
4. Irrational exuberance
One of the board’s key responsibilities is to hold management accountable. When management consistently over-promises and under-delivers, directors’ trust and confidence are eroded. Being realistic about what can be achieved – and by when – displays pragmatism and good judgment. Giving yourself a target deadline for delivery that can only be achieved.
What to do
Recognize that as indicative, the board may interpret as a firm commitment. Movements in progress or timing are likely to require explanations along the way. Outline the assumptions behind the plan. It thus helps to build into contingencies to allow for normal business delays. However, boards are struggling to achieve stretch goals and will quickly pick up on overly generous buffers.
The CEO writes about something because it’s important. Then the CFO goes into detail. The head of marketing includes it, to cover the financial analysis. The lawyers need a separate report to retain professional privilege. Directors have enough to read the same thing, spread out across the board pack. Not only does it make for disjunctive discussions and duplication, but it makes the board think management does not talk to each other.
What to do
Collaboration across the management team is essential. It breaks down silos and avoids people trying to protect their own territory. An article is addressed in a single report that brings together content from each of the relevant functions. The company secretary has a role to play in order to ensure the integrity of the organization.