Four steps to more insightful Board meetings and reports

Getting organisations through an Initial Public Offering (IPO) is no mean feat. Based on consultations with hundreds of boards of listed organisations of all shapes and sizes, Pippa Begg, Co-Chief Executive of Board Intelligence, an advisory firm specialised in board governance, provides advice on how boards can achieve best practice standards, tackle the stewardship challenge head on and be accountable to all shareholders. 

The transition from private capital that is in the hands of a few private investors or senior management to public ownership and the staggering accountability that comes with it is one of the biggest leaps an organisation can make. An IPO wipes out the possibility of back-room conversations held between a select few as the stewards of the organisation now answer to a much broader shareholder base. Public ownership requires mature, formalised and well thought through governance processes.

Plan the board meeting thoroughly

The responsibility of ensuring that boards are meeting the requirements of their enlarged shareholder base more often than not falls to the directors. Feedback shows that executive directors see board meetings as little more than “reporting shops”. There is a way around this. Meetings that are well planned with agendas laid out in advance are the key to efficiently run meetings that deliver concrete results.

To assist directors with deciphering the conversations that they should be having, Board Intelligence’s six conversation model is a useful starting point: 

Steering
1. Do we have the right strategy?
2. How can we work smarter?
3. What culture & policies do we need?

Supervising
4. Is our strategy on track?
5. Will we hit this year’s targets?
6. Are we working in the ‘right’ way? 

By asking these questions, directors can achieve the right balance between looking beyond their four walls, forward as well as back and maintain their strategic focus. Reviewing past performance and making strategic decisions need to be articulated with all stakeholders in mind, not just the extended shareholders. Other considerations include the current risks, culture and the best practice standards and policies that have been set. 

Remember, directors have a dual role made up of supervision (monitoring) and stewardship (guiding, advising and planning next steps). 

Come prepared

By focusing on directors’ duties, it can determined which materials should be brought to the board meeting and will prevent the buildup of an unwieldy board pack. Recent research by Board Intelligence and Cambridge Judge Business School found that it would take an entire day to read everything in a standard size board pack.

To lessen this burden, the best board packs contain the most relevant materials and a few key ingredients, starting with a CEO narrative. This should be a short summary of what is on the CEOs mind and should support and direct the directors’ discussion. A single page dashboard is also vital to provide a snapshot of the health of the business covering all of the value drivers (financial & non-financial). This dashboard should include strategy, performance and governance KPIs, not just a performance balanced scorecard.

Lastly there should be a formal finance report and a broader performance report that touches on customers, and of course, the all key decision papers. Providing templates for these decisions papers will ensure consistent high quality, no matter where in the organisation the business case arises from. 

Future-proofed processes

In the 21st century, well run boards do not only take into account the scope of information and the quality of the content but also leverage technology’s potential to automate the pack production process and ensure it is secure.

Automation ensures senior management stay focused on the business rather than rushing around to find data points and chasing last minute submission. And secure dedicated apps for board members enable the board to access and comment on their most confidential information in the comfort that their information is not at risk.

Beyond the board room

Achieving best practice standards is not an objective confined to the board room but must be at the core of the organisation, giving way to new governance processes throughout the organisation and a new calendar of activities. 

Whilst newly listed organisations are faced with what seems like an insurmountable list of new concerns, a disciplined senior team can conquer this steep learning curve through a shared commitment to best practice standards and a boardroom culture which then sets the tone for the entire organisation.