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Getting a handle on hefty board packs can be challenging, but armed with the right strategies, directors can zero in on the important details.
When seasoned director Craig Keary FAICD first started reading board packs, he would laboriously print out pages and write comments in the margins.
“Not only was this bad for the environment, but it was a complete nightmare to manage,” says Keary, whose board experience includes Lymphoma Australia, Australia Japan Business Cooperation Committee and various global AMP Capital businesses.
These days, Keary, now CEO of Keyview Financial Group, uses his iPad and annotation software such as Diligent or BoardPro to read and mark up pages.
Enterprise Learning Lead at University of Technology Sydney, Fiona Anson takes a different approach. “I’m a big fan of the highlighter pen,” says Anson, who previously served on the board of the Australian Information Industry Association (AIIA).
“I’ll read most of it online but then print out and highlight the parts that are most pertinent.”
Locating what matters
The best board papers will be easy to follow and clearly itemised into sections. A typical structure may include an executive summary, contextual or background information, analysis, recommendations or resolutions for action, as well as supporting documentation for any assertions.
Even so, some can still run to 800 pages.
Keary says one of the best ways to manage a weighty board pack is to understand its purpose, which, ideally, will be outlined in the board summary.
“While that summary doesn’t negate the need to read the whole pack, understanding the context and aim of the paper allows you to zero in on those important areas.”
Similarly, Anson will isolate the telling detail within the documents by asking herself what question needs to be answered or what decision needs to be made. “Then I drill down on what I need to know to be able to make that decision or address that topic,” she says.
The purpose of the paper may be evident in its name; be it a paper for decision or discussion, or an update or noting paper. But regardless of the type of board paper, Keary says its purpose should be clearly outlined upfront.
“It might be a strategy paper talking about the regulatory environment in Australia or internationally, and management may be providing that to the board for their information. That’s all well and good, but you still need to be clear on what you’re asking the board to look at or consider.”
Once Keary is clear on the purpose of the paper, he pays close attention to potential risks. “I’m equally focused on the commercial and growth aspects of the strategy, but you need to look hard at the things that are going to derail [the strategy] — that is, the actual risks.”
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Red flags to watch for
Keary says poor-quality board packs often have opinions or unsubstantiated information. “This can be really challenging for boards,” he notes.
“If something is being raised, but there’s no basis for it being raised, it can cause the board to dig deeper, which may or may not have been necessary.”
Anson agrees, adding that when reading papers, she is on the lookout for data that doesn’t necessarily make sense, “or numbers that don’t stack up”.
Some board papers, she says, are difficult for a board to digest, despite the author’s best intentions. This “lack of a clear ask” is a huge red flag in her book.
“You may be presented with a problem, but you’re not presented with options for a solution,” she says. “The board is generally not involved with the day-to-day running of the business, so you’re looking for the senior leadership team to give you direction on what the options are.”
Another red flag, according to Anson, is when only one option is presented in board papers. “It’s worrying if they only want you to say yes to this or to veto that. I want to know whether other options have been considered.”
Top 5 tips for getting to grips with board papers
Ask yourself, what is the purpose of the paper?
Highlight or mark up the salient parts.
Approach the board paper with objectivity by filtering out commentary from others.
Look for red flags in the form of inconsistent data or numbers, or a lack of information.
Speak up diplomatically about any red flags or seek clarification from the paper’s author.
Dealing with board paper problems
Dealing with red flags is crucial, says Anson, who takes a direct approach to addressing inconsistent or vague board papers.
“I can think of a recent case when the board was not given enough detail to make a decision. In this case, I spoke up and said I needed a little bit of clarity here, that I didn’t know if I had enough detail. As a board member, you have that obligation to be frank, to be upfront and curious, to make sure you have all the information you need.”
Keary agrees, adding that if the language is inscrutable or jargon-heavy, it’s best to seek answers from the source.
“Pick up the phone to the person who wrote the document and ask them,” he says.
“You can spend a lot of time spinning your wheels on those documents otherwise.”
This approach will enhance relationships between management and board, as well as the quality of the board papers, he adds.
“It helps build rapport and trust, and at the end of the day, board papers are really just a by-product of that rapport and trust.”
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