Some key aspects to consider when compiling board packs.

    Ensuring directors have the right information to make decisions is becoming a bigger governance challenge. As stakeholder expectations rise, the temptation is to add more information to board packs. But that risks swamping directors in unnecessary detail.

    Also apparent is the need for more board information on organisation intangibles: human capital, culture, ethics and values, for example. Board packs, however, have been traditionally slanted towards tangible information, such as financial statements and operational reviews.

    Here are 13 considerations in getting the balance right with board information:

    1. Context

    Although board packs tend to follow a uniform format, directors should resist a one-size-fits-all approach. Every organisation is different. A start-up venture will need a different board-pack structure compared to a larger organisation. So too a charity compared to a listed company. Directors should ensure the board pack reflects the organisation’s needs and context.

    2. The Chair

    The Chair decides the board agenda and board-pack structure, in conjunction with management. It’s important, therefore, that directors understand the Chair’s view on information requests and board protocols when sourcing data. The Chair might request that he or she coordinates all information requests from the board. There should also be protocols for how new information requests are treated in board papers and meetings.

    3. Agreed board-pack structure

    A good Chair will ask directors for their view on the board pack. Are there information gaps? Is unnecessary data provided? Is the board pack appropriately structured and cross-referenced with other information? Are the board papers too long or hard to read?

    Having achieved consensus, the Chair works with management to deliver the best board-paper structure.

    4. Related to strategy

    Strong board packs are closely aligned with organisation strategy. For example, a not-for-profit organisation outlines five key strategic goals and key risks during a strategy offsite with management and the board. Key issues and their performance indicators are agreed, and the board pack is structured along those lines.

    The pack has other information, but the focus is on aligning information to strategic goals and risks and using it to guide boardroom discussions.

    5. Readability

    A well-structured board pack is not enough on its own. Information must be clear, concise and valuable. Readability issues such structuring information in dot points rather than long-winded paragraphs, using graphics and tables to summarise information, and proof-reading the document for typing, grammar or style issues can make all the difference.

    An interesting, informative pack aids comprehension; a text-heavy, dour report that is over-run by unnecessary details risks directors skimming or glazing over it.

    6. Information delivery – part one

    A common complaint from directors, particularly those in smaller organisations, is board papers being delivered too close to the board meeting. Receiving the papers a day or two before the meeting makes it harder for directors to prepare. There should be a clear schedule that requires the board pack to be available the week before the meeting.

    At a minimum, boards should insist there is a weekend in between the delivery of the board pack and the board meeting, so that directors have time to digest the information and reflect.

    7. Information delivery – part two

    Many boards have moved to electronic delivery of information via mobile devices, such as iPads or laptops. Digitised board packs have benefits over paper-based ones: they are more secure, easier to update and have tools to find or reference information.

    However, some directors find paper-based reports easier to read and the board should consider whether the board-pack structure should change to better suit electronic delivery and consumption. Digital media requires a different style of writing compared to traditional report writing: for example, more lists, dot points and cross-headings that help readers scroll down information.

    8. Beyond the board pack

    Although the board pack remains the primary source of board information, it should be considered in the context of a broader information set for directors. High-performing boards create opportunities for directors to gather information about the organisation, beyond the board pack. They might devise an information set comprising analyst, industry and media reports about the organisation that directors receive daily.

    Other boards arrange site tours, opportunities for directors to meet staff and suppliers, and hear from independent experts.

    9. Human Capital

    This is one of the great governance challenges of our times. How boards can better understand organisation culture, value and ethics – and what customers, suppliers and other stakeholders think. Such intangible information is harder to capture in board papers and surveys on organisation culture and the like are no substitute for talking to people.

    Good boards create opportunity for directors to understand the organisation’s human capital: for example, a dinner with the executive team the night before the board meeting; attending focus groups with front-line staff or customers; or sanctioned fireside chats with the CEO’s direct reports. They also ensure board papers address human-capital issues.

    10. Relationship with Company Secretary

    In larger organisations, the company secretary is the day-to-day conduit for the board. New directors should build a good working relationship with the company secretary to understand board protocols and for information requests. Good company secretaries know where information is stored in organisations and who can provide it.

    11. Information requests

    Strong boards have inquisitive directors. But that does not mean every director request for information must be fulfilled. At times, Chairs might push back on information requests because they do not want to distract the management team with unnecessary data. A good Chair will know which requests provide “nice to have” data and which provide “must have” information. And how best to source those requests and include them in board packs for discussion at board meetings.

    If the board pack is tightly aligned to organisation strategy and risks, there shouldn’t be regular requests of management for left-field information.

    12. Information cycle

    In fast-moving organisations, a board pack and meeting every six weeks might not be enough. Many Chairs structure a weekly or fortnightly meeting with the CEO and some relay that information to the boards.

    Others might arrange a brief CEO update and video conference with directors every three weeks between board meetings. Or the Chair might organise an opportunity for directors to meet in between board meetings, through a site visit or expert presentation.

    The key is having some structure to the information cycle outside of board meetings without adding unnecessary bureaucracy.

    13. Annual review

    Directors should review the board-paper structure and content at least annually. Is the pack still meeting their needs? Is there evidence of board-paper “creep” because more data was added and kept there? Which information can be removed? How long is it taking directors to read each set of board papers? Are the papers too much of a slog to read?

    Ultimately, board packs are like any other facet of business: if you don’t measure it, you can’t manage it, adapt and better meet user needs.

    Latest news

    This is of of your complimentary pieces of content

    This is exclusive content.

    You have reached your limit for guest contents. The content you are trying to access is exclusive for AICD members. Please become a member for unlimited access.