Mastering board reporting for more effective governance 

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Mastering board reporting for more effective governance 

By iDeals Board
November 30, 2023
11 min read
board reporting

Making sure that you are getting accurate information and asking relevant questions can be challenging. However, PwC recommends that reporting to board of directors begins by ensuring that the board materials are clear and designed to promote transparency and trust.

In addition, shareholder reporting and transparency are now more important than ever for investors, who want to make informed decisions and assess the long-term sustainability of companies. 

This article explores the intricacies of effective board reporting and its role in the growing importance of corporate governance.

What is a board reporting

Reporting to the board is the process of compiling and sharing important information with the board of directors through board reports. 

A board report is a document that is presented to board members prior to the start of a board meeting. This paper should include information covered at the company board meeting.

A comprehensive board report usually includes the following attributes of a board reporting package:

  • Financial report
  • Clear analysis of growth forecasts
  • Strategic plans
  • Overviews of key metrics

What is the main purpose of a good board report?

Reporting to the board plays a pivotal role in the company’s board governance. This is a perfect tool to foster communication and effective collaboration among your board members. Other than that, the reports allow members to quickly grasp the crucial information and key meeting agenda items before the meeting. 

Thus, we provided below five purposes for the board of directors’ reporting.

  • Timely updates 

Creating reports promptly synchronizes executives and board committees. They ensure informed decision-making, providing the board with a real-time understanding of the organizational landscape.

  • Foundation for discussions

Board reporting format of communication establishes the framework for strategic discussions, improves employee engagement, and allows board members to dive into company strategy. 

  • Celebrating achievements

Good board reporting serves as a medium to celebrate organizational triumphs, amplify achievements, and foster a culture of accomplishment. 

  • Strategic roadmap

Board reports outline strategic plans, operational objectives, and key initiatives. Reports provide a clear and purposeful direction for the board, assisting in digital governance.

  • Transparency and accountability

Such reports offer a glimpse into an organization’s inner workings and serve as a window into its performance metrics and key activities.

4 types of board reports

Various subjects are frequently covered in a board meeting, with a specific emphasis. Strategic planning and forecasting financial results are examples of possible subjects for the next board meeting. Don’t hesitate to include these discussions in the content and format of the report. 

You may require a variety of board reports to offer updates on certain areas of business. The main four board reporting examples include the following reports. 

1. CEO board reports

The CEO report provides a comprehensive overview of strategic initiatives, organizational performance, challenges, board succession planning, and opportunities, offering insights into the CEO’s vision. This report ensures that the board has a top-level perspective necessary for informed decision-making.  

2. HR board report

The HR report focuses on the organization’s human resources landscape, including talent acquisition, development, and retention strategies. It provides updates on staffing, executive compensation, and workforce diversity, keeping the board informed about critical aspects of human capital management.

3. Financial reports

The financial review is the bedrock of board oversight, offering a detailed account of the organization’s fiscal health. Financial reporting includes income statements, balance sheets, and cash flow statements. Also, financial forecasts and KPIs provide context for a comprehensive financial status, guiding the board in risk assessment. 

4. Cybersecurity board reporting

Today, when cyber threats are ever-present, this type of report provides a comprehensive overview of the current threat landscape. It includes pre-read materials about the effectiveness of current security measures. The cyber board report ensures the company is well informed about its resilience against cyber threats and is equipped to decide regarding cybersecurity investments, policies, and incident response protocols.

Important to add that this report is part of the digital transformation governance model.

Board reporting best practices

For many boards, writing good reports may be difficult. Poorly drafted reports can contribute to decision-making confusion and inefficiency. This might be due to a lack of organization, omission of vital information, or poor presentation. Instead, we suggest implementing the following best practices in board reporting to deliver effective insights to the director’s report. Also, take a look at the board reporting tips below.

1. Clear and concise data presentation

Effective communication with board members requires clear and concise data presentation. Utilizing visually appealing charts, graphs, and tables significantly enhances the comprehension of complex information. To create a clear and engaging presentation of your recent performance, write slide headers that summarize the main messages and pair them with a high-level commentary. 

Tip. Use color-coding or icons to highlight areas of success or risk

2. Timeliness and frequency

It is important to align the frequency of reporting with the type of information being shared and the board’s need for regular updates. Financial reports, for instance, may be necessary monthly, while strategic planning updates may be suitable quarterly. Strike a balance between providing timely information and avoiding information overload.

Tip. Establish a reporting schedule that aligns with critical decision-making cycles

3. Relevance and alignment

When creating board reports, it’s important to make sure that they’re directly related to the organization’s goals and objectives. Each report should be in line with the organization’s priorities and show how much progress has been made toward achieving them. 

By focusing on the most important KPIs that directly impact the organization’s objectives, the board can better understand how well the organization is doing and where it’s headed. However, it’s better to leave out any extra information that is not necessary and instead focus on the key factors for the board’s attention.

Tip. Tailor the level of detail to the board’s familiarity with specific topics

How to write a board report effectively?

A recent survey by McKinsey showed that board directors and executives have not seen a corresponding increase in their impact on overall value creation, despite dedicating 19% more time to board-related activities since 2019. To unlock the potential and maximize board impact without overburdening board members with additional time commitments, crafting a well-structured board report is essential. This section describes the role of setting objectives, data collection, and analysis in good reporting.

Setting objectives

The goals should be closely connected to the organization’s overall strategy, so the board can see how well things are going. Whether they are looking at the company’s finances, keeping an eye on important projects, or dealing with new challenges, each goal should fit into the bigger picture. Consider conducting a SWOT analysis and setting SMART objectives.

Collecting and analyzing data

When creating a report for the board, it’s important to be very careful and thorough in collecting and analyzing data. Key Performance Indicators (KPIs) are very important and should be chosen carefully to match specific objectives. It’s also important to use both numerical and non-numerical data to get a full picture of the organization. 

If necessary, use advanced analytics tools to help find hidden information. Finally, highlight any important trends or concerns so the board can get a good understanding of how the organization is performing as a whole.

See how we can support your board meetings

Board reporting template and its structure

Crafting board reports is a crucial responsibility that usually falls under the corporate secretary’s duties. The corporate secretary’s expertise in governance and their understanding of the organization’s inner processes help in this task. In turn, effective board reports require a well-designed template for structured and consistent communication. 

Below we provided some effective practices when it comes to the practical part of writing a report.

  1. Use of clear and informative headings.
  2. Consistency in formatting is necessary for a professional and cohesive appearance.
  3. Strike a balance between visuals and text-based information.
  4. Provide a brief summary to help directors quickly understand the overall context.
  5. Involve your board in report writing.

Furthermore, don’t hesitate to check out the structure and comprehensive board report report in this part.

Company Name
Board Report – month, year
1. Executive summary

Brief overview of key achievements, challenges, and focus areas.
2. Financial highlights

Concise summary of financial performance, highlighting revenue, expenses, and profitability.
3. Operational Updates

Key operational activities, milestones, and progress on strategic initiatives.
4. Market overview

Current market conditions, competition landscape, and industry trends.
5. KPIs

Relevant performance indicators, noting improvements or concerns.
6. Risk management

Current risks, mitigation strategies, and potential changes in the risk landscape.
7. Governance and compliance

Adherence to governance standards and compliance updates.
8. HR highlights

Workforce-related matters, staffing, engagement, and key HR initiatives.
9. Future outlook

Insights into strategic direction, upcoming opportunities, and potential challenges.
10. Conclusion

Summarized key takeaways emphasizing company health and direction.
Name
Your title
Date

Things to avoid in the board reporting procedures

Understanding what aspects to include in a board report is only the first step; avoiding traps is also critical for a report’s success. To guarantee the impact and integrity of your board reports, keep the following points in mind.

  • Overly intricate structures or verbosity

Don’t overwhelm your board report with complicated language patterns and intricate report forms. Streamline your terminology and simplify the report format to improve comprehension.

  • Excessive visual complexity

While it’s important to have a presentation that looks good and grabs attention, avoid using too complicated a design that makes the report cluttered. Opt for a clean and simple design that puts the content at the forefront and doesn’t distract from the essential information.

  • Highlighting non-approved projects

Avoid overcommitting to unapproved projects during a board meeting. Stick to reporting on initiatives that have received the green light to ensure alignment with the board’s expectations.

How to present a board report?

Effectively delivering a director’s report takes more than simply gathering facts; it also necessitates a deliberate strategy to guarantee clarity and engagement. Consider the following tips to effectively communicate your insights:

  • Clear and concise communication
    Avoid unnecessary jargon and strive for straightforward, concise communication. Present key points in a logical sequence, allowing board members to follow the narrative easily.
  • Visual aids for emphasis
    Enhance your verbal communication with well-crafted visual aids. Charts, graphs, and relevant visuals provide a quick and compelling overview of complex data. 
  • Engage with the audience
    Encourage questions and conversations, making sure that all board members feel included in the conversation. Make your presentation relevant to the board’s interests and goals.
  • Practice and preparation
    Practice your speech to establish an easy flow and answer possible queries or issues ahead of time. Remember to familiarize yourself with the subject before the board meeting.

What tools to use in board report creation?

The technology is a great choice for creating successful board reports. Explore how the following board reporting tools improve the quality of your board report creation.

1. Software solutions

Since 2021, 81% of organizations have attempted to use digital technologies at all executive levels. Consider incorporating advanced board reporting software to automate the entire reporting process. Noteworthy solutions, such as iDeals Board, include a full set of tools aimed at improving board cooperation and communication. 

These systems include user-friendly interfaces that simplify complicated reporting structures and ensure a consistent experience for all stakeholders. Consider incorporating the iDeals Board into your toolset for enhanced board reporting.

2. Data security and compliance

According to Ernst & Young’s poll, 64% of respondents regard cybersecurity to be their top concern for 2023. Thus, protecting sensitive information becomes extremely important in all spheres of corporate governance, particularly in board reporting. You can do this by using encryption tools, such as board portals, to keep data safe while it’s being transmitted and stored. 

When choosing board reporting software, go for one that follows industry-specific compliance standards to ensure that your data remains confidential and secure. To further improve your security, it’s a good idea to regularly update protocols and educate users on best practices. 

Gathering feedback: how to improve your board report

It’s not a secret that effective communication is a linchpin to the success of the company. On the other hand, ineffective workplace communication costs U.S. businesses a staggering $1.2 trillion per year, as reported by Grammarly. It is one of the primary concerns among businesses, even the most successful ones. However, proper communication and feedback can level up your board report.

Here is how feedback can improve the quality of your board deck:

  • Post-report assessment and feedback are critical steps in improving your process. It is critical to actively seek comments from board members to grasp their viewpoints on the clarity, relevancy, and overall efficacy of the report. 
  • Encourage open communication and provide opportunities for board members to offer ideas on what worked well and what may be improved.

Key takeaways 

  1. CEO, HR, financial, and cybersecurity reports are vital categories, each addressing strategic initiatives, human resources, financial health, and cybersecurity threats, respectively.
  2. Financial reports, growth forecasts, strategic goals, and key metrics overviews are common components of a thorough board report.
  3. Board reporting offers regular updates, fostering discussions, acknowledging achievements, outlining strategic plans, and ensuring transparency and accountability.

FAQ

1. How often do you submit a board report?

Report to the board of directors is often submitted quarterly, but this might vary. Certain companies may choose monthly reports for more regular updates, but others may prefer a semi-annual schedule for a more comprehensive analysis. Match the frequency of board report writing to the organization’s strategic goals and the demand for timely insights.

2. How long should a board report be?

 A concise and focused report consists of typically 10 to 20 pages. The aim is to deliver key insights and metrics clearly, using visuals and executive summaries for effectiveness.

3. How to simplify creating board reports?

When writing board reports, consider utilizing a board report template for the upcoming board meeting, ensuring the company’s performance and financial health of the organization are prominently featured in the next board report. Also, consider using board portal software.