Board reporting is a topic that hardly comes up more often in the corporate world. That is understandable, considering it is widely viewed as a “less glamorous” aspect of Corporate Governance.
However, the fact remains board reporting plays a crucial role in assessing the effectiveness of any board. This post talks about board reporting, board effectiveness, and the meeting points.
Effective decision-making drives corporate success.
The effectiveness of a board’s decisions is a reliable measure of how successful that board is. Having the right people on a board is non-negotiable. However, even the best brains will struggle to arrive at effective decisions if deprived of good quality and timely information. That’s having so much ability with no enabling environment to put it to work.
In essence, it is almost impossible to ensure effective decision-making without adequate and timely information.
Boards tend ask for more information.
Board reporting is not just about furnishing board members with information. Instead, it entails giving them the exact information they need to arrive at effective conclusions. This is why management must know what is required from board papers. Knowing how a board functions, the kind of people around the board table, and the correct way of structuring a board report to include the required information will go a long way in ensuring board effectiveness.
Boards are always “busy.”
Managers should never forget that boards and their members are not always available. For example, the highest number of board meetings in a year is ten times, with each meeting lasting a few hours. Therefore, board reporting must be done in line with these short time frames. In addition, the production and distribution of board papers should factor in the numbers and lengths of these meetings.
Board members should provide clear directives at every step of the process, including the information they need, why they need it, how important it is, and the expected outcome from the use of such information.
The board may need information for advice, approval, or just to put out official information.
All of the above-board reporting factors contribute directly or indirectly to the board’s effectiveness. This, again, points to the fact that there is no board effectiveness without excellent board reporting. While both are different concepts, they are closely interrelated.