Published: September 11, 2023
Read Time: 14 minutes
A robust board paper policy will help you create better board packs and is essential for ensuring directors receive the right information at the right time to fulfil their duties.
In this comprehensive article we aim to provides guidance on developing a board paper policy that will streamline your board papers and board reporting.
Follow these tips to help you implement a board paper policy that meets your board’s needs.
Why do you need a Board Paper Policy?
Board packs are a critical information channel for directors, empowering informed discussions and decisions at board meetings. The quality of the board papers contained inside will directly impact how well the board performs its strategy and oversight role. As such, a clear and cohesive policy around the preparation and delivery of board papers is important.
A board paper policy codifies the processes and standards for this crucial information conduit between management and the board. It assists in aligning report content with the board’s needs, not just management preferences. A well through out board paper policy increases accountability and the consistency of board papers.
Without guidance, board packs can often become bloated information dumps from management and reports ramble across hundreds of pages filled with operational minutiae. A robust board paper policy prevents this by setting clear expectations.
A dedicated board paper policy allows more comprehensive guidance on the nuances of board reporting. Ultimately it empowers the board to take ownership of the information it receives.
Scope of the Policy
The policy should begin by clarifying its scope and objectives.
For example the policy scope might state:
“This board paper policy aims to ensure directors receive materials that enable them to sufficiently discharge their duties. It sets standards and processes for the preparation, review and delivery of board papers for regular board meetings.”
The scope statement establishes the policy as fulfilling a governance-enabling role for the board. It also delineates that the policy focuses specifically on regular board meeting papers, not ad hoc reporting.
If certain types of board reports are out of scope (e.g. papers exclusively for board committees), they can be explicitly excluded from the scope statement.
Defining the policy coverage and objectives upfront aligns expectations for the user of the policy.
Board vs Management Reporting Responsibilities
A clear delineation of board versus management reporting responsibilities lays the foundation for effective information flows and the focus of board papers.
This allows those preparing or editing papers to make much clearer calls on whether the paper contents aligns to the boards requirements.
The policy should provide an outline of:
Board duties like strategic guidance, risk management, CEO performance, etc. These should be fleshed out more fully in a seperate policy that is part of the board’s wider governance framework but are worth summarising in this policy.
Management responsibilities relating to daily operations, financials, project execution, staff oversight, etc.
The board’s expectation to receive strategic and other priority information from management to satisfy their duties.
Management’s role in providing this information through board reporting channels like papers, presentations and proposals.
Reinforcing the divide between board and management orientation avoids reports becoming sidetracked in operational minutiae. It also clarifies the need for management to take a board lens when preparing board papers.
Guidelines for Writing Board Papers
Establishing guidelines for writing board papers is essential to consistently high quality board papers. Some key elements to cover in the policy include:
Style and tone - Define the style and tone that should be used. Many boards opt for formal but simple business language suited to a board audience. The policy should state that the writer should aim to:
avoid cryptic acronyms or jargon
be objective and balanced
Length - Include page limits to keep papers focused. Lengthy reports should have executive summaries.
Structure - Use consistent templates. Number sections and pages for easy navigation.
Visual presentation - Incorporate charts, graphs and images where appropriate but don’t let them dominate text.
Level of detail - Be concise and high-level. Drill down into operational details only where highly relevant to a strategic issue or decision.
Evidence basis - Provide data, examples and credible external validation like analyst reports to back key points.
Recommendations - Where the paper relates to a particular proposal or decision, include a clearly delineated recommendation or resolved clause.
These establish writing standards that deter verbose or convoluted reporting.
Legislative, regulatory or exchange rules around certain report contents and formats, e.g. financial statements
While standards provide helpful guidance and reference, the policy should emphasise that the board will decide the format that meets directors’ needs rather than an external standard. Ultimately the board needs to decide what information satisfies their duties - not external standards.
Timing of Board Paper Delivery
Ensure directors have adequate time to review papers by setting clear deadlines for submission and distribution prior to meetings.
Adjust timeframes for board paper submissions appropriately based on the volume of papers, complexity of contents, and scheduling considerations like external director availability.
State that late or incomplete paper submissions are unacceptable except under exceptional circumstances. Late, or worse incomplete, board papers impair directors’ ability to prepare properly.
Paper Review and Sign-off Process
Papers generally undergo review by senior leadership and the company secretary before circulation to the board. The policy should establish protocols such as:
The department or person responsible for the paper reviews it first.
Papers then undergo review by the CEO, CFO, COO and/or other senior staff as applicable.
The company secretary reviews papers last to ensure quality, consistency and compliance with board requirements.
The chair and/or CEO must personally sign off on board papers before distribution.
Build in adequate lead time and be clear on responsibility for reviews. This prevents late changes and errors slipping through.
Board Paper Selection Criteria
Guidance around which papers get produced for the board versus just handled at the management level reduces misaligned work.
Papers presented to the board should:
Relate to the board’s role and top strategic priorities, not routine operations.
Provide background critical to decisions reserved for the board per the delegation of authority policy.
Cover issues with major strategic, financial, risk, regulatory or reputational implications.
Represent a legal or governance requirement for periodic board reporting.
The policy gives managers clarity on appropriate issues to escalate to the board versus resolving themselves. It focuses valuable board capacity on what matters most.
Standard Report Formats and Templates
Using templates improves professionalism, consistency and ease of information absorption. The policy should:
Mandate specific templates for common paper types like CEO and CFO reports, committee updates, risk reports, etc.
Set standards for template content sections, length, visual presentation, data displays, etc.
Encourage graphs, charts and diagrams where helpful but discourage over-reliance on visuals.
Establish corporate branding guidelines and standard covers/headers for board papers.
While templates bring uniformity, the policy should advise authors to tailor paper content to the issue at hand. Avoid rigidly forcing subjects into ill-suited templates.
Confidentiality and Security
Address appropriate confidentiality precautions such as:
Marking papers with any confidentiality levels like “Commercial in Confidence.”
Securely distributing board packs, e.g. password protection on digital copies or better yet via a board portal.
Any data privacy, intellectual property, or regulatory restrictions on board report contents and distribution.
Devising clear guidance on confidentiality reduces risk of unauthorised access or leaks of sensitive information.
Policy Review and Access
Indicate that the board will periodically review the board paper policy for any needed updates. Specify where the latest version can be accessed, e.g. board portal, company intranet, etc.
Implementation Requires Collaboration
A board paper policy empowers the board to better control information flows. But management will be responsible for executing many policy directives.
Collaborate with the CEO, CFO, company secretary and other senior contributors to ensure the policy’s guidelines are realistic and executable. Get their input when formulating templates and developing timelines.
Educate management on the strategic purpose behind the policy - to get directors the right information. Clarify it is not meant as an insult to previous reporting but rather continuous improvement.
Consider rolling out policy requirements gradually if management workloads require adjustment time. Momentum will build as the quality benefits materialise.
Ensure the CEO exemplifies commitment to the policy. Their visible buy-in will profoundly influence behaviours throughout the management ranks.
The Bottom Line
Ultimately an effective board paper policy empowers directors with the insights they need to provide leadership. Concise, strategically-focused papers presented in a timely manner allow the board to have meaningful discussions and make wise decisions.
A strong board paper policy crystallises information flow requirements so that management executes and the board receives materials that comply both in letter and spirit. The result is directors can actively carry out their duties with knowledge and confidence - a powerful outcome that rewards the investment to develop and implement a robust board paper policy.
A well-constructed board paper should contain all the relevant information required for the board of directors to make fully informed decisions on the issues at hand. There should be an executive summary at the beginning that highlights the key points, recommendations, and conclusions. This allows the board to quickly grasp the essence of the paper.
Following the executive summary, the paper should provide extensive background information and context on the particular issues under consideration. Thorough analysis and discussion of the main pros and cons, implications, data insights, and projected outcomes of various decision options should be included.
Importantly, the board paper should put forward clear recommendations from management on the preferred course of action based on the preceding analysis. Any relevant data, charts, case studies, or other documentation that supports the recommendations and provides more details should be incorporated into the appendices or attachment.
What are the objectives of board paper?
Fundamentally, a board paper needs to provide the board of directors with the necessary information, situation analysis, insightful perspectives, and management recommendations required to facilitate optimal discussion and decision-making on key issues facing the organisation.
Additionally, the board paper serves to update the board on critical matters relating to strategy, risk, finance, operations, compliance, and performance that fall under the board's purview.
A well-constructed paper will enable board members to be properly informed and prepared to provide valuable, strategic-level guidance to management. It also allows directors to fulfil their oversight responsibilities in terms of understanding emerging risks, critiquing business plans, and monitoring adherence to policies. Finally, board papers create a formal record of the facts, analyses, and recommendations made to the board regarding major decisions.
What is a board report?
A board report is a formal document that provides the board of directors with a periodic update on the company's overall operational activities, financial performance, risk management, legal and regulatory compliance, strategy execution, and any other significant issues or initiatives. The CEO and senior management team are typically responsible for developing board reports on a quarterly or annual basis.
The report should summarise key metrics, trends, risks, and opportunities across each major business function since the last update. The level of detail provided should allow board members to exercise effective and informed oversight of the company's performance and areas for improvement.
Visual elements like charts, graphs, and tables should be used to reinforce key points and provide quick access to important data. While summarising overall status, the report should highlight or call attention to any pressing or emerging issues warranting board discussion. It may contain recommendations from management for board input or future actions. A well-crafted board report enables the board to stay abreast of company operations and effectively carry out its governance role.
How do you format a board paper?
When formatting a board paper, the goal should be to maximise readability, professionalism, and effectiveness for the board audience. There are several techniques that can enhance the formatting.
First, use clear, descriptive section headings and subheadings to organise the content into logical parts and make it easy to navigate. Within sections, bullet points or numbered lists should be used to break up dense paragraphs and highlight key takeaways, recommendations, or steps.
Visual elements like charts, graphs, and tables should be incorporated to summarise complex data, trends, and insights in a visually compelling yet easy to grasp manner. White space, margins, and page breaks should be used judiciously to avoid a feeling of text overload.
Page numbers, footers, the date, and company branding elements should be included in the headers or footers. The paper should follow any established templates, style guides, or examples provided by the board. A clean, polished, and professional format makes a strong impression and facilitates review by busy board members.
How do you present papers to a board?
When presenting a board paper in a board meeting, it is important to deliver the information in an impactful and engaging manner. Start with a brief verbal summary that touches on the most critical information, conclusions, and recommendations from the paper. Emphasise the relevance to key strategic priorities and decisions on the board's agenda. Offer to provide more extensive detail on any background or analyses that directors feel is necessary.
Use visual aids like PowerPoint slides, charts, and graphs to reinforce the main points and data trends from the paper. Read the room to assess engagement levels and invite clarifying questions, feedback, or alternative perspectives from board members. Be prepared to address any areas of ambiguity or provide supplemental information if the initial paper lacked sufficient detail on key considerations.
Keep the tone professional yet conversational to facilitate an interactive discussion. The presentation style should complement the board paper itself by making the content accessible and contributing to a thoughtful board dialogue.
What is a board document?
The term board document refers broadly to any written material that is provided to the board of directors for fulfilling their oversight responsibilities and making informed decisions on company matters.
Typical board documents include the board papers or board reports prepared for specific meetings which analyse issues and provide recommendations requiring board input. Other examples are quarterly or annual performance reports, financial statements, budgets, project proposals, minutes from committee meetings, legal documents, company policies, management memos, presentations, regulatory filings, and governance guidelines.
These documents keep the board informed, help set meeting agendas, provide supporting data, and create a formal record of facts presented to the directors. They span operational, financial, legal, regulatory, strategic, and administrative topics that fall under the board's purview. Maintaining professional, comprehensive board documents is crucial for boards to exercise due diligence and satisfy fiduciary duties.
What should a board report look like?
An effective board report should have a professional, strategically focused, and easy to digest format to successfully inform board decision-making. The report should start with an executive summary providing an overview of the key performance indicators, operational metrics, financial results, risks, opportunities, and macro trends most relevant for board oversight.
The body of the report should elaborate on each strategic area, with data synthesised via charts, graphs, and visuals to facilitate rapid comprehension of complex dynamics. Data-rich appendices can provide access to more detailed analytics for interested board members. A consistent structure with section headings, summary paragraphs, and clear segmentation of information promotes skimmability.
Period-over-period comparisons, benchmarking data, and variance analysis will highlight the most material changes and prioritise the issues requiring board attention. Calls to action should be included where board input is required. A polished, visually appealing report format demonstrates thoroughness while respecting directors' limited time.
How do you write a board note?
To effectively write a board note, the author should succinctly yet thoroughly communicate the context, analysis, implications, and recommendations surrounding a key issue, initiative, or upcoming decision that requires board attention. The tone should be formal but clear. Open with a brief background that frames the topic and provides necessary context for understanding its strategic significance.
Include relevant metrics, research data, competitive insights, or operating circumstances that informed perspective on the matter. Offer a balanced discussion of potential benefits, risks, and considerations associated with any recommendations. Outline next steps and specifically note any areas requiring board input or sign-off.
The insights presented should be substantive yet concise. attachments or links to supplemental materials can provide access to more extensive analysis for interested board members. Charts and graphs help summarise quantitative information visually. Close with clear recommendations and/or discussion questions for the board. Aim for 1-2 pages in length with a focused, objective tone.
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