Board Reports etc.

A short while ago I was asked what I, as a NED, would expect to receive from a small to mid-sized business (approx 5m turnover and 40 staff) with a Board of Executive Directors. Below is my response - it is a personal view, and other NEDs might have other preferences or requirements, but if you have nothing in place at the moment, this could be a starting place for you and your team.


 

Role of the Board…

 

The Board needs to do several things:

  1. Verify that the company is being managed well and that policies and processes are:
    1. suitable, and
    2.  effective
  2. Verify that performance is meeting expectations and any variations are understood
    1. Focus on the future:
      1. Short term – what is being done to address any variations to expected performance
      2. Longer term:
        1. strategy (where are we going, why)
        2.  effectiveness of strategy deployment (how, same hymn sheet, effectiveness)
  3. Agree the priorities for the business in light of the resources available.

Time Management

For a SME with a management team approx 25% of the Board’s meeting time should be on ‘are we on track’, 15% (ish) on ‘are our policies suitable and effective (including used in practice)’ with the balance on discussion of issues, opportunities and challenges in the day to day business and looking to the future (e.g. which bits of the business will need to behave differently to thrive in the future that the Board envisages).

 

Monthly Board Reporting…

 

Monthly Reports are the key mechanism to keep the Board informed. They should comprise:

  • 1 to 2 pages of narrative
  • A sheet of KPIs (mostly graphical, but key numbers are ok)
  • Backing papers for anything that requires further explanation.

 

Part of the responsibility of the Author is to accurately distil the minutia of detail, the ‘data’, that they will be aware of/receive from subordinates into information that informs Board understanding and debate.

 

What is in the narrative of (monthly) Board Reports?

  • Things that have occurred in the last 30 days (i.e. since the last report) that influence our view of the future, and 
  • how well we are performing against plan.
  • Things I want wider input on

 

More specifically (using the CEO report as an example):

  • Decisions Required
  • What were the stated priorities in the last report (and what happened)
  • Other significant Events including (as needed – don’t report if nothing significant has occurred)
    • People
    • Operations/Finance
    • Customers/Sales
    • Markets & Competition
  • Top 3 (or so) Priority Items for the current period and progress intended during the period
  • Issues/Opportunities/Challenges (Summary only – if input/advice required then more info and/or a formal briefing sheet should accompany the report as a separate document)

 

For larger businesses the department bits of the CEO report, might highlight particular elements of the respective department report or, more likely, have a ‘CEO precis’ of the departments activity/performance.

 

A Departmental Report would typically comprise:

  • What were the stated priorities in the last report (and what happened)
  • Significant events and achievements (trumpet progress and share success)
  • Top 3 (or so) Priority Items for the current period and progress intended during the period
  • Issues/Opportunities/Challenges (Summary only – if input/advice required then more info and/or a formal briefing sheet should accompany the report as a separate document)

The KPI’s will vary by department and should include:

  • a mix of forward and backward-looking indicators.
  • Project Reporting (RAG)

 

Project Reporting

A key part of an Executive Director’s (or Department Head) role is to manage change through the business. Where this a significant project, typically spanning several months, progress should be reported using RAG reporting (Red, Amber, Green) in the KPI sheet and periodically (at a frequency in line with the importance, scope and duration of the project) a more detailed presentation made to the Board (e.g. Gantt of planned vs actual, challenges overcome, issues anticipated (and how to address them) etc.)

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