By Mary Morel | 23 April 2015
Many Australian business people are not aware that Standards Australia has developed a standard for board reporting, HB 403–2004 Best Practice Board Reporting. This standard outlines board reporting responsibilities and provides guidelines on how to present information in board papers. It is available here.
The standard looks at qualities of effective board papers and provides some guidelines about what to include in a board pack. This is a particularly useful reference for smaller organisations that don’t have corporate secretariat teams.
Most board packs have regular financial and non-financial reports (e.g. chief executive report, financial reports and operational reports). What content should be included in these reports is usually fairly well understood, though finding the appropriate balance between key messages and the details is always a challenge.
As well as the regular reports, a board pack will also include decision and noting (information) papers. Often these are one-off papers, but sometimes they may be regular updates. The range of topics covered can be diverse.
Most organisations have a financial threshold for matters needing board approval, but in my opinion, the rationale for including other papers in a board pack is often haphazard. I have seen some papers that would have been better as one paragraph in the chief executive’s report. On the other hand, I have heard of a chair being verbally briefed about an ongoing contentious issue just before it hit the media. He had been on the board for a year and this was the first he’d heard of the issue.
Deciding what information should go to the board is a joint decision between the board and management, but all senior staff should be aware of the board’s reporting requirements so they know whether papers are necessary or not.
Writing standards for board papers
Once organisations are clear about what should be included in a board pack and what can be safely deleted, they should review the writing standards of their board pack. The most common complaint from directors is that board packs are too long. This cry is getting louder now that many directors are reading the information online. Yet length is usually just an indication that the papers are not clear – a much greater sin than length!
One of the best ways to improve board reporting is to review a board pack from both governance and writing perspectives. Is your organisation’s reporting keeping the board adequately informed about strategy, risks and compliance issues? Are your organisation’s board packs clear, concise and easy to read?
If you’re concerned about the writing quality of your board pack, take a look at our reviewing and benchmarking service.