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What does a good board pack look like?

Over the next couple of months I will post a couple of blogs about corporate governance with some thoughts on roles, compositions and effective processes at boards.  As a big Simon Sinek fan, I would normally kick things off at the top level thinking about purpose, but in this case I’m going to break the rule. I’m going to start by diving into a detail, what I think a good board pack looks like.  I’m doing this partly because of an immediate need to cover this elsewhere and secondly because it’s probably an easier topic to nail down!

Having said that, the Why, What How runs deep so let’s start with purpose, at least at a micro level, the purpose of the board pack.  

Why do we prepare board packs – which I think are frequently seen by executive managers in investee companies as an unnecessary burden, distraction and cost of receiving capital?  Interestingly, as a side note, in my experience there is a high correlation between deep embracing of board data and company performance in the long run and the way founders and managers respond to board process and reporting is an indicator to me of their capability and quality.  

Fundamentally I believe that a board pack has one purpose with a few direct and indirect outcomes.  The purpose is to enable all board participants to be deeply informed about the critical performance matters in the company in an efficient, consistent and comprehensive way.  The outcomes of achieving a high level of knowledge from having creat board reporting are:

  1. Significantly more efficient board meetings where it is possible to project forwards and problem solve rather than play catch up on what has already happened and therefore can’t be changed. 
  2. Better decision making through comprehensive background data.  Making choices with partial information is always less effective.  Gaps can be temporal meaning trends are not easy to spot, or thematic meaning it is not possible to reflect on interconnections (for example platform performance and customer service, or sales and marketing).
  3. Increased confidence by non-executive board members in the executive likely leading to greater trust and executive freedom.
  4. Increased implicit responsibility of board members to engage.  It’s easy for me not to spend time preparing for board meetings where there is little support to help me, conversely I feel embarrassed and guilty if I have not respected the effort that a team has put into creation of a great board pack.
  5. The creation of a ready made data room to support fund raising or corporate M&A and accelerated confidence and trust building of incoming stakeholders.
  6. Improved organisational culture resulting from transparency, consistency and discipline that is required to have good board reporting in place.  

When a management team weighs up the cost benefit analysis of taking time to prepare high quality board packs, as they must given the limited resources in any start up, they should reflect on all these matters.  The decision may still be that resources are better deployed elsewhere but that should be a comprehensive and intentional decision rather than a passive choice resulting from failing to consider the implications.  

So what does a good board pack look like?  Well first of all a negative response – it doesn’t need to be long, although it might be.  It does not look the same for every company, the depth of contents will vary by company depending on scope of activities, maturity and availability of data.  It does needs to be pragmatic and be designed to meet the needs of and the capability of the company and team. 

What is important is:

  1. Consistency – the pack should pretty much look and feel the same month to month allowing both rapid familiarity helping readers consume data more efficiently, but also lead to easy comparison month to month to help identify trends and patterns.  
  2. Data richness and efficiency.  Subjective views are important and relevant, but backing them up with data leads to more effective analysis and decisions.  Easy visualisation (graphs help) makes this better. However the data needs to be relevant and focussed. There is a pareto of data significance that you should take into account when designing a pack that depends on deep understanding of how your business functions to identify.  What your workers eat for lunch will be irrelevant for most organisations, but for a PT instructor business it might be one of the most critical factors in success. Work out what matters and find ways to measure and report it.  
  3. Comparability – how is performance compared to plan, prior periods and maybe some other relevant benchmark like competitor performance.
  4. Timeliness – if you can’t get a pack to me 10 working days after period end you’re doing something wrong.  
  5. Comprehensiveness.  Your pack should cover all of the following areas.  The amount to report in each category will vary significantly company to company but it is unlikely that every one of the following matters is not relevant to an extent that warrants at least minimal commentary: 
    1. Your market place – insight into customers and competitors
    2. Product/service delivery performance – including both internal (platform downtime) and external (NPS) metrics 
    3. Product/service development plans and delivery – new products, product enhancements, product improvements, remedial fixes.
    4. Marketing – how well are you getting your message out
    5. Sales – what does your pipeline and process performance look like
    6. Customer service performance
    7. Staff – performance, wellbeing, capability gaps and recruitment, issues
    8. Operational resources, space, kit.
    9. Financial resources and performance
    10. Compliance matters, have you done the stuff you should and has anything happened that shouldn’t have from a legal, cultural, safety, environmental, financial (etc.) perspective
    11. Board performance, at least a rolling action list plus minutes – did you record and do the things that you said you would do in past meetings.  

Every pack will look and feel different, and board members will appreciate brevity as long as it is efficient rather than resulting from lack of completeness.  The data you include should be stuff that the leadership team in a business are thinking about all the time, so it should not be difficult to pull together if you have capable people, strong processes and good discipline.  Creating good board reports should be a beneficial exercise for executives as well as non-executives.  

On reflection I now realise that I need to do a huge amount of work on my own board process to meet the standards I’m expecting of my investee companies, but at least that means you know I am speaking from a position of empathy at how hard this stuff is!

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