Named Founder Friendly Investors 2021 & 2022 by Inc.
Angie Henson - January 25, 2024
Reporting to a board of directors, whether in person or in writing, is an important and often daunting task. Board members collectively oversee company management, establish a strategic vision, and (for public companies) protect the interests of shareholders. Therefore, they must rely on concise, easily digestible reports containing timely and relevant company information.
While board reports tend to be brief, the time and effort required to create them can be substantial, so it’s a good idea to establish some guidelines and boundaries for effective board report creation. In this blog post, we will review what is necessary to report to board members successfully, while examining some of the key elements and formatting tips that lead to well-received board reports.
A board report is a compact document distributed to board members prior to a board meeting. The report summarizes key performance metrics, accomplishments, and challenges that have occurred since the last board meeting. The information contained in a board report is likely to come from multiple departments, including finance, sales, marketing, and operations.
Board reports are extremely important since board members rely on these concise reports as a resource to help them make high-level decisions. These reports are entered into the board meeting minutes and are often the only resource time-crunched board members review prior to the meeting.
Not all board reports are created equally. Several varieties have evolved based on the area of focus and the presenter. For example, a CEO board report is a periodic summary of financial performance and business objectives, and an HR board report assesses the stability of the company based on employee engagement, turnover, and talent. Other variations include marketing board reports and operational board reports.
Despite the number of formats, the intended audience (the board) is what sets board reports apart from all other types of reports. The contents of a board report must be appropriate for a high level audience and include enough information to support important strategic decisions. The heightened emphasis on conciseness is usually less of a factor for other reports intended for general employee distribution.
Understanding your audience is the first and most important rule when it comes to creating and delivering an effective board report. Each board member has a different background and level of understanding, and they are likely to come from many different industries. Tailor the report to be concise and informational while not being too technical or complicated. Additional tips to help you create, format, and deliver a board report effectively include:
● Using headings and subheadings to make the report easier to navigate
● Avoiding wordiness and overly long sentences and paragraphs
● Formatting with bullet points to highlight key performance indicators (KPIs)
● Using visual aids and graphs to illustrate important data and trends
● Providing a summary of major insights and developments
Ensure the report aligns with the organization’s goals and objectives by emphasizing strategic priorities and metrics to assess company health. The implications of any information presented should be explained if it is not self-evident.
The contents of a board report vary depending on the type of business, makeup of the board, and type of report (CEO, HR, Marketing, etc.). However, all board reports should include the following basic structural elements:
● A title to describe the content and focus of the report in a few words
● An executive summary of the key takeaways
● A table of contents to improve readability
● Relevant KPIs and benchmarks to summarize major insights and developments
● Modeling and recommendations
● Next steps
● An appendix for any metrics or modeling that require additional explanation
Data within the report should provide a big picture view of performance within the context of your industry. For example, financial metrics should be delivered in a straightforward fashion, with an emphasis on the bottom line, and should be compared to the company’s own historical performance as well as industry benchmarks.
By definition, KPIs are metrics that define a company’s performance against specific business goals, so they should be featured prominently in the board report and easy to find and understand. Any important risks and challenges faced by the company should also be emphasized in the body of the report.
Board meetings are typically scheduled well in advance, and board members are likely to be juggling dozens of priorities. To accommodate these constraints, board report completion should adhere to a strict deadline. You can improve schedule adherence by enlisting the help of subject matter experts (finance, marketing, operations, etc.) to deliver their facts, figures, and recommendations well in advance.
The use of appropriate visual aids, including charts and graphs, is another important consideration. Line charts to convey trends and bar charts to compare independent values are simple yet effective graphical options.
Lastly, the review and editing processes can make or break your report, since even a single error can become a source of questions or embarrassment. Double and triple check your grammar, facts, and figures, then ask an associate to do the same. The intense board interest in financial information makes accuracy essential, so verifying data and graph contents is highly advisable.
Board reports should include as much important company information as possible in a concise format. This combination can be challenging without the right planning, guidance, and most importantly, support from colleagues, to ensure you deliver a successful product. By adhering to some basic formatting rules, including essential elements in a logical sequence, and verifying all information is accurate, timely, and clear, you can build a better brand for yourself as well as your organization.
Honesty and transparency are essential when you report to board members, so if you don’t have the answer, let them know. Follow up with subject matter experts after the meeting to obtain the best information available, then reply to the board promptly.
On rare occasions, a board report might exceed 25 pages of information due to unusual requests or circumstances, but most board reports run between 3 and 8 pages in length. Anything longer can overwhelm your intended audience with information.
Financial data is an essential element of the board report that can appear boring or confusing in plain text. Simple charts and graphs can effectively convey financial data and trends, including KPI performance and comparisons to industry or internal benchmarks, in a more relatable and digestible format.
Well-founded recommendations that are supported by data can be a valuable addition to the board report and demonstrate a proactive stance that helps to guide decision making. The facts supporting any recommendations should be clearly defined in the report.
Board reporting should coincide with regularly scheduled board meetings. Most companies schedule board meetings based on a monthly, quarterly, or annual cadence, depending on the needs and preferences of the organization.