The seminar began with consideration for what is wrong with the status quo. Whilst the Corporate Governance Code provides guidelines, particularly in relation to clear information being provided in a timely fashion, problems can still arise. Niamh spoke about extensive board packs consisting of hundreds, if not thousands of pages, with boards receiving them only a few days before the meeting. An average board pack is 288 pages long and takes approximately nine hours to read. However, research showed that board members spent an average of three hours reading their papers – regardless of the pack’s length. This meant that a board pack should consist of no more than 100 pages. This is a salient reminder that providing a board with the correct material, succinctly presented will improve the quality of a meeting.
Niamh recommended that thought should be given to:
The size of the board pack;
- Ensuring it contains the right information, with clarity about what the board needs to do;
- CEOs should ensure that conversations in the board room are strategic and not supervisory. Niamh suggested the management team have conversations with board members outside the board room and suggested a buddying relationship for specific issues.
- It is useful to have monthly meetings with the Chair to update what has and has not gone well and what is on the mind of the CEO. This enables continuation of the dialogue between the Chair and CEO outside the boardroom.
- Niamh cautioned that as experts, board members’ conversations can often focus on discussions about their specific field and stray away from operational strategy and governance. There is a challenge to the CEO to police that.
- It is important that there is an efficient and effective secretariat to manage communications and flow of information between the management team and the board.
- It is as important that Chairs have a strong background and knowledge of their field, as much as experience of being a chair and running a board.
In drafting board papers, CEOs were warned to look out for:
- Blind spots, making sure important information is not buried, and ensuring the full picture, including external factors, are presented;
- Blizzards, when there is so much information it is difficult to identify what it is the board needs to know; and
- Burdens - Board members often sit on multiple boards and it is important that the management team have a clear strategy outlined for what they want from the board to breed effective communication, challenge and discussion in the board room.
Niamh described how Board Intelligence views an effective board as being formed of three pillars: individuals, information and infrastructure. Recommending that conversations are held to clarify the organisation’s strategy and identify the culture and policies needed, Niamh felt these were necessary for clarifying the board’s priorities. Niamh suggested that executive management team and board agree the forward plan a year ahead for when the strategic discussions will be taking place, so there are no surprise agendas.
Niamh added that whilst there a board should have a balance of skills, members should have sufficient knowledge to help them steer discussions. She added that non-executive directors could be given specific areas to gain greater understanding. This was not so they could advocate on its behalf in a board meeting, but so they develop their knowledge, help answer questions, and act as a bridge for the board. She also felt that a board pack was a litmus test of an organisation’s culture – it should demonstrate transparency, openness and accountability. She advised that organisations should ensure decisions were made by the right people, with delegated authorities in some areas of the business and that board meetings should take place in appropriate locations to reflect the operations of the business.
The session moved onto a discussion about ‘what good looks like’.
Members were advised that board papers should:
- Be effective and efficient. An evaluation can be carried out, using the methodology provided. This can be used to provide both positive and negative feedback to those who write the papers.
- Be objective.
- Have a clear executive summary, no more than a page long.
- Lead to a good discussion with a good outcome.
The person that wrote the paper may be brought into the meeting so they can hear the discussion. This means that they are aware of how effective their paper has been; can answer questions; and are under no illusion of what further action may be required. There is also a duty for the CEO to clearly outline to the report authors the issues they want to raise and questions they want answered. The language in a board paper also matters. Members were advised that it should not be too technical, being clear, concise, compelling and conversational.
Decision papers should ask five questions:
- What is needed?
- What are the opportunities?
- Why now?
- What options were considered and rejected?
- What next?
Niamh advised having a governance checklist, covering templates and the workflow of a paper; its briefing and review process; training is provided to report authors; and consideration is given to going digital.
Finally, Niamh described how efficiencies, compliance, risk reduction and improved quality can be achieved when organisations address the matter of verbose board packs. Good quality papers can lead to better use of time; more effective relationships; better conversations; and higher quality decision making.