Board documents: Types, software & must-know best practices
Board documents drive the critical decisions board members will make. Too much information risks overloading board members’ precious time and resources, while too little risks withholding information necessary to make the calls that keep a firm on track.
So, what documents do you need to include for board meetings? What follows are some best practices to help you prepare successfully for your next board meeting, including:
- What board documents are
- Common types of board documents
- Challenges of preparing documents for the board of directors
- Sharing board documents
- The role of board document software in modern board rooms
What is a board document?
A board document is any official paperwork or records the board of directors creates, distributes and uses. From meeting agendas to formal correspondence, board documents inform board members about key issues, track decisions and maintain transparency within an organization.
10 types of board documents
The bulk of the board documents are compiled into a board pack. This is the main information source for board members before and during a board meeting.
Board packs generally include the following key documents:
1. Agenda: The agenda provides an overview of what will be discussed at the board meeting. Agendas should confirm the purpose of the meeting, outline specific topics for discussion and review previous agendas to address any necessary follow-up. Agendas should be sent to board directors at least two weeks before the meeting. Board directors are busy, and sharing the agenda in advance helps ensure they have time to review it for the upcoming meeting.
2. Previous board meeting minutes: It’s important to review what was discussed in previous meetings and the current outcome or status. Our article, ‘How to take effective meeting minutes (with templates)’, offers insight into making the most of your minutes and maximizing meeting productivity.
3. Board resolutions: A board resolution is a formal decision or action the board approves. Boards may need to refer back to them in the future or use them to defend various decisions. Including board resolutions in board documents is crucial to keeping both easy to access and secure.
4. Bylaws: This board document outlines the governance structure, rules and procedures of the organization. Having it on hand ensures all board activities comply with the bylaws.
5. Annual reports: An annual report summarizes the organization’s activities and financial performance over the past year. The board may need to reference annual reports to compare performance with the current year, refresh themselves on previous achievements or set new data-based targets.
6. Documentation: This is the heart of the board pack, the information that guides board discussion and decision-making. Documentation can include:
- Company strategy
- Performance information via financial, human resources and management reports
- Approved budgets
- Committee reports
- Status of action items
- Program highlights for the year to date
- Board roles and responsibilities
- Copy of the organization’s bylaws
- Human resources updates
For nonprofit boards, any documents pertaining to fundraising activities should be included.
7. CEO (or equivalent) risk/compliance report: This report, created by the CEO, presents risks that may impact an organization’s strategy, business model or viability. The CEO’s team should research and make the report weeks — possibly months — before a board meeting.
8. Financial reports: Financial reports are among the key board meeting documents. Without the financial report, board members cannot make informed, thoughtful decisions on the company's direction.
Financial reports typically include:
- A statement of financial position
- A statement of activities
- Cash flow forecast
- Actual results compared to budget
- Operational figures
The CFO and senior management from Finance are responsible for generating this report and should provide the materials promptly for inclusion in the board pack.
9. Committee reports: Corporate board committee reports will likely be more technical, with detailed financial reports, strategic reports, research on a product or service, or analysis. These reports should also be included in the board packs. Nonprofit committee reports focus more on fundraising or community involvement.
10. Major correspondence: In many organizations, an investment relations officer (IRO), who reports to the board, is the main point of contact between shareholders and board directors. The IRO usually handles inquiries from shareholders and investors. This information, which can raise critical issues, should be addressed at board meetings.
“As year-round shareholder activism becomes the new norm in the American boardroom, directors are called upon to prepare for and respond to any possible activist challenges,” according to the National Association of Corporate Directors.
Common challenges of preparing board of directors documents
Preparing board of directors documents is often a complex task. Many organizations struggle with:
- Balancing information and clarity: A common mistake is including too much data in board meeting documents; directors may feel overwhelmed with all the documents needing review. Only include the most necessary, time-sensitive and relevant documents.
- Ensuring accuracy: Above all, board documents must be accurate. This is especially crucial for financial reports, legal issues, decisions made in previous meetings and any material subject to regulatory requirements. Keeping information accurate across documents and versions can pose a significant challenge.
- Maintaining consistency: Boards often need multiple versions of the same document, such as multiple copies of meeting minutes or years of annual reports. Consistent formatting, terminology, and structure help avoid confusion, but ensuring quality across a high volume of materials is also difficult.
- Security: Board documents contain highly sensitive information, including financial data and personnel decisions. Using secure communication channels and encrypted storage is optimal, but many boards communicate over text and email, potentially compromising data.
- Timeliness: Another mistake is distributing the materials too late, which doesn’t give the board of directors time to review the documents. “The timely receipt of the board papers allows directors to form an opinion before a meeting and to ask questions of the CEO and management about what will be discussed or decided at meetings or to discuss issues among themselves,” notes Effective Governance. “The provision of timely and accurate information can be critical to the board’s ability to appropriately challenge and scrutinize management.”
Sharing board documents
How far in advance should you send the documents to board directors?
The World Economic Forum suggests, “Try to ensure board members get their papers at least a week in advance. If there’s a deadline, meet it with several days to spare in case there is feedback before it goes to the board.”
How timely document sharing is often comes down to the tools organizations use. Many have shifted to virtual tools amid more widespread digital transformation, but several other options are still used frequently:
- Email: This is one of the most traditional methods for sharing board documents. While prone to breaches, email remains in use because it is familiar, simple, and easy for less technologically inclined board members. Many organizations also appreciate the ability to send and receive emails almost instantly.
- File-sharing services: Cloud-based file-sharing services allow users to upload documents to a shared folder, which board members can access through a link. More secure than emails, secretaries can create links only directors can access, mitigating the risk that board data will fall into bad hands. That said, file-sharing security doesn’t always rise to board-level governance.
- Physical distribution: Printed board books were once the gold standard of board document sharing. Many corporate secretaries still print and mail board packets, which can be easier for some board members to review. While avoiding technology can appeal to less savvy board members, it also introduces significant administrative and supplies costs.
- Board documents software: These secure, cloud-based platforms represent the future of board document sharing. Tools like Diligent Boards centralize all board documents and communication in an encrypted governance platform, promoting streamlined document creation, collaboration and distribution.
The role of board document software in modern board rooms
Board document software transforms how modern boardrooms operate. Traditional paper-based processes have given way to paperless board documents, enhancing the boards’ ability to access secure, accurate and mission-critical information.
The shift to centralized board documents also helps meet legal and compliance requirements, making boardrooms more agile. Boards that adopt board management software embrace:
- Efficiency: Board document software eliminates the need for printed materials, making board documents more sustainable and less costly to produce. Moreover, paperless board documents offer directors instant access to up-to-date insights, driving more strategic decision-making.
- Centralized access to documents: Board document software stores all material, from meeting minutes to financial reports, in a single, secure location. As a result, board members can access documents from any device, anywhere, ensuring they always have accurate information at their fingertips.
- Enhanced security: Board document software is a significant step up from emails and file sharing. Through encryption and access controls, software safeguards sensitive information. As a result, robust board document software reduces the risk of data breaches, unauthorized access, and loss of client-attorney privilege.
- Real-time updates and version control: Paper board documents take hours to produce and can easily be outdated when the board meeting updates. Digital documents, however, can be updated instantly, with versioning that makes it easier for boards to see only the latest materials. This reduces confusion over which documents to reference.
- Improved compliance and governance: Laws and regulatory requirements set standards for how the board must store and engage with board documents. Board document software securely archives records and offers easy retrieval for audits. This streamlines board governance and ensures the board is always audit-ready.
Key features of board document software
Though board document software can simplify how boards leverage key documents, features matter. Technology only helps if it can streamline time-consuming or inconvenient processes. When it comes to document management, look for features like:
- A document library: Building your document library means files will always be where you left them. Others will have access to the same library you do, making it easier for board members and other leaders to retrieve documents as needed.
- Centralization: Board document software should centralize your documents, collaboration and communication. The more boards can do in one place, the easier it is to track activity and share with the broader board as needed.
- Document collaboration tools: Many board document software solutions allow for in-platform annotation and commenting. This can include integrations with leading tools like Google Workspace and Microsoft 365 to meet collaborators in their own tools.
- Version control: Editing documents without software can make identifying which document is the latest version difficult, especially if multiple board members are involved. Board document software can maintain different versions and automatically identify which is up to date, keeping all collaborators on the same page.
- Secure storage: Software, especially solutions with end-to-end encryption, can protect board documents better than email or paper versions. This maintains a high level of security so sensitive information doesn’t fall into the wrong hands.
Future trends in board document software
Recent digital transformation has accelerated the pace of change in most boardrooms, and board documents are no exception. The growth of new technology and new internal and external pressures will likely shape the future of board document software, including:
- AI integration for smarter decision-making: Artificial intelligence is revolutionizing how board members interact with documents, helping to quickly analyze large volumes of data. AI-powered tools can flag key insights, summarize reports and even recommend actions.
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Discover more- Governance automation: More boards are streamlining governance tasks through workflow automation, including document approval workflows, compliance tracking and meeting scheduling. This both saves time and reduces human error.
- Enhanced cybersecurity for sensitive data: Boards handle highly sensitive data, prioritizing cybersecurity. Board document software will incorporate more advanced encryption methods, multi-factor authentication and secure file-sharing capabilities now and in the future.
- Cloud-based collaboration tools: As more boards work remotely or with distributed teams, cloud-based software is becoming increasingly essential. These platforms allow board members to collaborate in real-time on documents, share updates instantly and access materials from anywhere, improving flexibility and collaboration.
Making the digital switch for better board documents
Compiling a massive number of documents and shipping them to board directors is the traditional method of distributing paper board packs. Some board packs may be distributed via email. However, what happens if a last-minute document or change is needed? How are boards of directors to maintain version control?
Digital board portals can help streamline communication, maintain version control with the most updated materials, reduce mailing and printing costs, collate information, and ease staff's time and work burden. While tools like Diligent Boards, part of the Diligent One Platform, can revolutionize document management, not all software solutions are made equal.
Download our board management software buyers’ guide to learn what to look for — and what to avoid — in your new board document software.
FAQs
What is board document software?
Board document software is a platform that helps organizations manage, store and securely share important board materials, including meeting agendas, minutes, financial reports and governance documents. It streamlines workflows, promoting efficient document access, collaboration and approval.
How much does board document software cost?
The cost of board document software varies based on the features, number of users and the organization's size; there are even free solutions on the market. While no and low-cost options sound appealing, they can cost your board and your organization in other ways. Learn more about the hidden cost of free board management software before you settle on a solution.
How does board documents software improve governance?
Board document software enhances governance by simplifying document storage, sharing and approval workflows. It promotes better collaboration and decision-making by providing real-time access to important materials, facilitating compliance with legal requirements and reducing the risk of errors and delays.
What is the difference between a board portal and board document software?
A board portal is a comprehensive platform that combines features like meeting scheduling, secure document sharing and real-time communication. It will often include additional tools for governance and collaboration beyond document management. Board document software focuses specifically on storing, organizing and retrieving board materials.
