Do your senior managers see board reporting as a chore? In part two of our series on effective board reporting, James Beck GAICD explores how directors can get the right information from management and design a meeting agenda that works.
In part two of our series on effective board reporting, James Beck explores how to get the right information from management and design a meeting agenda that works.
If you asked senior managers whether they saw value in attending board meetings, what would their honest response be? Often managers are treated as though their time was limitless; with all board requests for information given priority regardless of the managers’ capacity to action them.
Similarly, senior managers may have to devote considerable time each month not only to attending board meetings, but also compiling papers and/or presentations for the board. And then there are those meetings where the directors are at war with each other or with the CEO and management—hardly encouraging for managers.
Boards need to handle these scenarios before they become a major issue for the organisation.
Getting the right information
While boards should ask for more information where it is necessary for the directors to fulfil their fiduciary duties, problems arise where:
- Directors are delving too deeply in management at the expense of governance.
- The information directors are given does not meet their requirements.
First, micromanagement usually occurs when directors don’t understand their roles. Clearly articulating the role of the board and that of management to directors in a board charter, for example, can assist with this issue.
If directors push back on the information provided and always want more before making a decision, the chair should give constructive feedback to the CEO on what the board expects. The information provided in the board papers builds trust between the board and management where it is accurate, timely, written for directors not managers, and well organised.
Further, a calendar of board and committee meeting dates along with timelines for paper submissions lets managers know when papers must be prepared. For each meeting, it is recommended that a due date be set for submitting draft papers that allows for revisions.
Busy managers spending hours, or even days, in the boardroom or outside the room waiting to be summoned adds to the cost of governance rather than enhancing the bottom line. Even worse for managers is when their agenda items are cut short or dropped.
A well-designed agenda helps to avoid this, as does a screening process. Given the range of issues and limited time that most boards will have to deal with them, it is important for an agenda to include only those items ripe for productive discussion, and where some decision can be reached.
If management has not developed the item enough for productive discussion, and more information is needed, it may be appropriate to delay inclusion until a later meeting. Similarly, if there is insufficient time for management to prepare accompanying documentation to aid decision making, it is often better, if at all possible, to leave the item until another meeting.
Overcoming boardroom dysfunction
For effective meetings, consider encouraging these behaviours:
- Respecting the agenda – Directors valuing management’s time and focusing on the issues of importance to the organisation.
- Asking the tough questions – Questioning management in a courteous manner; managers should understand that directors have the right to question them.
- Creating friendly, constructive dissention – Dissent or expressing an alternate opinion is critical to avoiding conformity, but it must be done in a balanced way to avoid conflict.
- Listening – Directors and managers listening and learning from each other.
- Effective board papers – Managers understanding and delivering effective board papers (see part one of our series, ‘Effective board reporting: Writing').
For more information, read James Beck's article, 'Do you senior managers see board meetings as a chore?'
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