Meghan Day

Principal Solution Designer

Board reporting best practices for influential GRC leaders in 2024

Today’s governance, risk and compliance (GRC) is a far cry from the GRC of previous years and decades. Rapidly evolving technology, economic uncertainty and shifting geopolitics have all drastically changed the business landscape. As boards look for clear, timely intel on which to base their decisions, board reporting — and board reporting best practices in particular — becomes mission critical.

This new emphasis spans all levels of the organization. Board members depend on critical insights, but C-suite executives and the practitioners they oversee must first prepare them. How can that be done without overburdening risk and compliance teams?

Here, we’ll explain:

• Board reporting best practices that increase effectiveness
• What makes a good board report
• Common board reporting mistakes to avoid
• How board reporting software streamlines your efforts

11 board reporting best practices

Board reporting is not one-size-fits-all. At its most basic, though, a board report is a single deliverable that compiles insights on a given topic — human resources or environmental, social, governance (ESG), for example — into a single resource.

Yet, countless employees at multiple levels will touch that report:

• Practitioners will prepare it
• The C-suite will guide the preparation
• The board will ultimately use it to make better decisions

Board reporting best practices are vital to creating board reports that check all those boxes. These include:

1. Communicating clearly: The reports themselves should communicate essential information to the board. But delivering those reports also relies on clear communication. Develop a reporting structure that allows practitioners and the C-suite to create consistent reports and give the board quick access.
2. Establishing a schedule: Board reporting is only valuable if it’s timely. Creating a reporting cadence gives stakeholders fresh insight into the organization’s performance and risk landscape.
3. Aligning reporting with strategic goals: Board reporting doesn’t exist in a vacuum. Instead, it’s a glimpse into the organization’s performance against predetermined goals. Executives at the C-suite level should share the overarching goals and strategies of the organization with their teams so the reports articulate how business activities contribute to those objectives.
4. Including key performance indicators (KPI): Relevant KPIs are another board reporting best practice teams can use to quickly and clearly communicate the organization’s performance in crucial areas. Boards can then quickly assess the metrics and any associated trends. Learn more specifics about board governance metrics here.
5. Outlining risk and mitigation strategies: Boards also need a clear understanding of the risk landscape. This includes updates on known risks and forecasts on emerging ones. Don’t just list the risks themselves, either. Offer mitigation strategies for each that the board can consider. This aids the board in making swift and informed decisions.
6. Utilizing visuals: Board members don’t need to be data analysts. Consider how to ensure no extra work on their part is needed to understand critical data and trends. Charts, graphs, and more can help data lead to more productive discussions and faster decisions.
7. Providing a narrative: Beyond visuals, add narratives explaining the report's data. You are the expert in the field, and your team’s commentary is critical. But of course, triple-check that the report is jargon-free (a simple but frequently forgotten step). Many people prefer to use software that facilitates both visuals and commentary. Board reporting in this style helps board members and other stakeholders understand what the data means and any broader trends it represents. Like visuals, ‌commentary is vital for empowering your board to make effective and timely decisions when it counts.
8. Implementing a feedback loop: There must be a mechanism to communicate feedback on board reports. This should include a pathway for executives to comment on reports before presenting them to the board and a second pathway for the board to ask questions or offer recommendations. Collecting feedback unlocks continuous improvement. This feedback loop helps to foster the top-down and bottom-up approach — a perspective that GRC analyst and pundit Michael Rasmussen shared in-depth with Diligent.
9. Looking to the future: The best board reporting isn’t limited to the past. Instead, examine what’s ahead. Include a brief forecast and any strategic recommendations so the board can anticipate what’s coming and prepare accordingly — leveraging integrated analytics and automation.
10. Prioritizing data security: Board reports must be confidential. Ensure you’ve implemented robust security measures to guarantee that reports won’t fall into the wrong hands. This includes both internal controls for preparing and handling reports and encryption for the tools you use to distribute and communicate about them. For example, assessing risks associated with free board management portals such as unsecured cloud-based data. Another consideration is whether your board communication practices (email, etc.) protect or sacrifice your legal privilege. The WeWork vs Softbank lawsuit demonstrated how critical it is to evaluate communication methods and ensure your board communications are protected.
11. Offering board reporting training: Executives are responsible for building teams that understand and can leverage board reporting best practices. Offer thorough onboarding and ongoing training so they have the necessary skills and knowledge to meet and exceed board expectations.

What does a good board report look like?

A good board report offers the board both critical information at a glance and deeper narratives and data they can dig into over time. Board reporting best practices go a long way toward solid board reports, but your reports’ effectiveness has everything to do with the structure.

What a good report looks like will vary based on the type of report it is. Generally speaking, though, a good board report will include the following:

What are the common mistakes to avoid in board reporting?

Board reporting is a lot like Goldilocks — there is such a thing as too little information and even too much, and there is an art to getting it just right. On the path to effective board reporting, these are the pitfalls the C-level and their teams must avoid:

1. Lack of clarity: Board reporting misses the mark when it’s too long or uses overly complex language. When that happens, the report may be thorough, but the board won’t understand it. Strive to create clear and concise reports without leaving out critical information.
2. Misalignment with strategic goals: Reports are challenging to act on when the narratives and KPIs don’t match the company’s direction. Ensure you create an explicit link between the information in your reporting and the organization’s strategic goals.
3. Inconsistent format: Boards will review an updated version of the same report many times throughout the year. If every GRC update looks different, quickly understanding and comparing the reports isn’t easy. A consistent framework streamlines report creation since teams can compile the same information every time.
4. Unreliable reporting: Effective board reports depend on data. If your reporting is inconsistent, siloed, or sporadic, that data could be inaccurate by the time it reaches the board. Today, leaders with the most effective board reports leverage technology so the board always has fresh insights. For instance, leaders are using automation, ensuring their program is driven by analytics, and eradicating silos by consolidating software across departments.
5. Failure to collaborate: Your reports should spark ongoing conversation, whether feedback, questions or a discussion about possible solutions. For robust reporting, departments need to work together. The CEO, CISO, CFO, and COO should communicate to ensure a holistic view of organizational risk. Rather than using multiple tools for one-off siloed reports, what if your GRC software met your daily, weekly, quarterly, and annual needs? Your teams would have quality data at their fingertips. This ensures alignment with organizational goals, fostering effective board reporting. Simultaneously, the board gains access to clear, insightful information crucial for strategic decision-making. Create a secure, integrated, and interactive environment to facilitate collaboration before, during and after board meetings.

Streamline board reporting by consolidating software into one platform

Though board reporting comes in after your strategy, objectives and goals are in place, it should be anything but an afterthought. Board reporting best practices underpin everything else that makes the board effective: proactivity and strategic decision-making. As the business landscape evolves, senior leadership teams — including CEOs, CISOs, general counsel, and more — are looking for greater oversight into board reports and the activities it takes to create them. For that, they’re turning to software.

Integrated GRC gives boards comprehensive data in an easy-to-view dashboard, balancing the need for deep insights that are also accessible. At the same time, consistent data powered by accurate analytics and cross-departmental visibility reduces the burden on both the C-suite and practitioners to complete the repetitive tasks board reporting requires. Instead, those teams can be the experts and advisors they are, offering nuanced analysis and insights rather than rote statistics.

The Diligent One platform centralizes the entire GRC practice by:

• Channeling the power of Diligent Market Intelligence
• Connecting disparate internal and external data sources in a single dashboard
• Complementing your data with a powerful analytics engine
• Consolidating your view of risk

Learn more about how better GRC starts with the Diligent One Platform.

Frequently asked questions

How can I structure my board report for maximum impact?

To structure your board report for maximum impact:

1. Strike a balance of data and commentary.
2. Include ample KPIs and accompanying visuals, then pair that with a narrative that explains what those metrics mean.
3. Once you’ve settled on a structure, use it consistently so the board knows exactly what the report contains and can quickly digest it.

How can I ensure that my board report is concise yet comprehensive?

Aligning board reports with your organizational objective is the best way to ensure they’re concise and comprehensive. You can then prioritize the insights, KPIs, and visuals the board will need to make informed decisions about those objectives.

How can I tailor board reports to different types of stakeholders on the board?

Tailoring board reports to different stakeholders on the board requires understanding each director, their priorities and responsibilities and their ability to interpret data. Create reports that support the board in defining the organization’s strategic direction and provide that information in multiple ways — raw data, visuals, and narratives — so all directors can engage with it.

How can I gather feedback from board members to improve future reports?

Choosing a platform that enables commenting and communication from board members is a fantastic way to create a feedback loop. The board can access reports between meetings, add feedback, and even engage in conversation, all in one secure platform.

How can I ensure my board reports align with the organization's strategic goals?

Align your board reports with the organization’s strategic goals by first familiarizing yourself with the strategic plan. With that as your foundation, you’ll be able to identify and report on measures that reflect the organization’s progress against that plan. This also requires communication across departments before the board meeting as the strategic plan will likely contain objectives for multiple business areas — finance, risk and compliance, and cybersecurity, for example. Platforms like Diligent One can facilitate communication across the entire C-suite.