Board members need effective board reports in order to make good decisions. Board reporting is a crucial part of good governance, and good reporting ensures that board reports are both clear and comprehensive.
Good board reporting should be clear and concise. It should give the board the ability to discharge its duties without ambiguity. It should include information which is relevant and also which is delivered in a timely fashion that aids in decision making.
- Reports are crucial to the effective running of the board
- They should allow for effective decision making around what to do next
- Poorly integrated systems can often affect board reporting
- Reports provide board directors the opportunity to hear from different stakeholders
What does good board reporting look like?
Good reporting should provide management with information which they can rely on when it comes to making their decisions.
The creation of board reports is vital to the working of the board and good reports should be able to integrate both financial and non-financial reporting. They should allow for trend analysis and projections.
Boards today are increasingly evaluating information around different issues such as ESG from multiple stakeholders. The financial information used in board reports should be relevant, material, comparable, reliable, and understandable.
What can hinder good reporting?
A challenge to effective reporting can sometimes be that businesses are hampered by poorly integrated or ineffective business information systems. By centralising such information systems, it becomes easier for a business to integrate information from multiple sources in order to aid in reporting to the board.
One problem with board packs is that they can too often be more backward looking than is necessary and this may not be helpful when it comes to allowing the board to plan its strategy going forward. They are also getting longer and more costly to produce.
Recurring documents should be compiled in advance as much as possible and repeatable processes can be streamlined. Those compiling reports should also look for opportunities to provide a narrative around the numbers when it comes to reporting financial information.
The different types of board reports
There can be a CEO board report or a HR board report. The CEO report can provide a breakdown of the financials along with the achievement of particular objectives.
On the other hand the HR report may discuss hiring efforts and employee turnover, diversity and inclusion and employee engagement.
Reports should cover recent, current, and upcoming projects along with a financial review and recommendations.
In addition to the above, board reports should also give information on sales, marketing, finance, and production and should relay data in an engaging way.
The features of good board reporting are that it is clear, relevant, provides comparable data, and is delivered in a timely manner. Board members should be able to rely on the sources quoted.
To be most effective, reports should cover recent current and upcoming projects along with a financial review and recommendations. They should either reassure the board when everything is on track or alert them if there are any risks on the horizon. Many reports however, are filled with too much detail before they get to the point that board members need to know. So, it is important to be concise.
A board report template
In order to write good board reports it may be useful to start with a strong template, since this provides structure and consistency in branding. The report should be signposted with useful headings and this will help to put things in context and all data to be compared.
The formatting of reports should be consistent, and there should be a clear objective in mind for the report. In addition, a mix of both visual and text based information can be helpful for busy board members.
In addition to all of that, a summary can be helpful to directors who want to get a quick overview of the situation.
So, understanding what is needed when it comes to creating reports for the board is important since these will be delivered to board members prior to meetings and are essential components in the effectiveness of these meetings.
Such reports provide the context for discussing how the company is performing and so takeaways and recommendations should also be included. There may be a need for different kinds of reports depending on the sort of topics that are up for discussion at meetings.
The definition of a good board report
So, in summary, board reports are documents which are distributed to board members in advance of board meetings.
The aim is to present data which leads to the more effective running of meetings.
It is best to avoid information overload and to stick to concise and clear formatting.
Reports should provide a clear analysis of the situation and focus on future actions and they should be distributed in a timely fashion.