Grant Thornton’s recent report, The Board – Creating and Protecting Value asks this question.
Here we look at what information directors and non-execs should be provided with – and how this compares to what they actually get.
The Grant Thornton report was published earlier this year. It is the result of research with chief executives, chairs, directors of finance/chief financial officers, board members/non-executive directors and company secretaries, from a range of sectors.
What do members need?
Directors should receive ‘clear, timely and comprehensive information from within the organisation’ alongside ‘relevant briefings and information from outside the organisation’, according to the report.
The survey findings show a strong bias towards the internal. 93% of respondents felt that they receive enough background on developments within their firm.
These might come in the form of internal briefings, office or site visits, or presentations from other senior managers.
Those in local government and publicly-listed companies are least likely to believe they get what they need. Those in AIM-listed firms and charities are most likely to be satisfied with the internal reports they receive.
External information is in short supply
Although most are happy with their level of education on internal matters, nearly a quarter of respondents (23%) felt that they do not receive sufficient intelligence to keep up with developments outside their organisation.
Examples of areas where they would welcome more include board training and briefings on governance. With governance a hot topic – a recent article asked if boards should be more proactive on governance and the Financial Reporting Council’s annual report suggested that boards need better governance – updates on compliance issues sound a valuable addition to directors’ briefings.
Timing and design are important
Not only do directors need the right data, they have to receive it in a timely way. There’s no point receiving reams of information if there’s no time to digest it before they meet.
The way this intelligence is delivered is also vital.
If papers are formatted or presented in a way that hinders reading or understanding, this is a barrier to informed decisions.
90% of those surveyed believe that agendas and papers are delivered appropriately (in terms of timing and format).
However, the report’s authors make the point that in their experience – in dealing with organisations like the NHS, as an example – the volume and jargon-heavy nature of information presented to directors can pose a challenge.
With papers often exceeding 300 pages, it can be near-impossible for members to read the data and extract the most relevant facts.
How to provide the right information to your board members
First – find out what they need.
Ask your directors what they need to know prior to meetings and how they prefer to receive this. Think about:
- How many papers should be included in each pack – how many can they realistically read?
- Is there an optimal length for papers – do you need to provide guidance to contributors?
- Do they like to receive packs in hard copy or read them online? Most boards will have a mix of preferences. Can you deliver papers in ways that suit everybody? A good board portal will allow you to provide paper packs for those who want them, while giving online or pdf options for those who prefer to read in soft copy.
- When should they receive packs to make sure they have time to read and digest the information included? Last-minute changes to papers can cause delays – particularly if you deliver hard copies by post or courier.
Boards rely on the information they are given to make informed decisions on key strategic issues. Ensuring they receive the right materials, in the best format, plays a huge role in helping to ensure effective decision-making.
Directors’ time is limited – and costly. The preparation they do for meetings also plays a large part in ensuring that your board is as efficient as possible.
You can read more about how a portal-based approach to board packs helped one organisation to make its board more efficient – as well helping to produce more cost-effective and professional papers. Download a case study here.