Position it!

Position it!

Board papers are a perennial challenge.  That makes them a reliable topic in board evaluation reports.  First the good news: over the two decades we’ve been reviewing boards, we have seen improvements.  There’s a greater awareness of the need to keep papers short and to avoid unnecessary detail – and some have not only managed to get the length under control, they’ve even managed to make it stick for a while.  But the bad news is that usually it doesn’t last.  Most problematically, board pack inflation is a problem that every board faces.  Some have regular clear-outs.  For others, they’ve learnt to live with it – but at the cost of unnecessary difficulty in the pre-meeting preparation, as well as a great deal of frustration.

Perhaps the single most important thing is for papers to have a good introductory page.  If this positions the topic effectively, the reader stands a better chance of being able to tackle a meaty paper with some idea of what to look out for and think about.  (Not to mention with more enthusiasm.)  But often we see this part of the paper not achieving what it needs to – despite, or sometimes because of, reliance on a template.  So here’s some guidance for management on positioning, along with a few tips on what to avoid.

Good practices to consider…

Make clear at the outset what’s wanted from the Board, using meaningful words rather than shorthand or boilerplate.  If a decision is required, don’t just say “For Decision”.  Set out right up front what decision the Board is being asked to make.  And if no decision is required, explain what the management team is looking for from the discussion.  Advice?  Ideas?  Early-stage guidance?  Challenge?  And around what in particular?

Things to avoid…

Using terms that are so standard or general that they are not particularly helpful.  The best you can say about “For noting” or “The Board is asked to note the contents of this paper” is that it shows no decision is required.  But what exactly does “noting” mean?  Why exactly does the agenda give discussion time, if the only purpose is “noting”?  Presumably for some reason.  Don’t leave the NEDs to infer the objectives for the discussion, as they’ll probably come to different answers.

Good practices to consider…

Explain why the question covered by this paper matters for achieving our strategic objectives. What will be the strategic impact and what is its relative importance?  Whether it’s a market-related issue (product, positioning, ESG, impact on stakeholders…) or an internal development initiative (systems, people, control…), an indication of its strategic relevance helps.

Things to avoid…

Failing to connect the issue under review to where we are trying to get to.  Management can assume that it’s obvious – and so it might be to them, but NEDs aren’t working with the strategy every day.  Don’t let the strategic relevance get submerged by the passage of time or lost among multiple papers.

Good practices to consider…

Anticipate the “so what?” question by highlighting the possible implications (both positive and negative headlines – key points only).  As well as showing the strategic impact, it’s about giving an indication of, for example, the risks, the anticipated financial impact, the organisational control and culture implications or the impact on stakeholders.  Then the readers know where to pay attention as they go through the paper.

Things to avoid…

Leaving it for the reader to work everything out for themselves.  The writer knows (or should know) what needs highlighting, so it makes sense to share it upfront.  It shouldn’t become a quiz.  And the risk of “leading the reader” is an inadequate excuse for not being helpful: experienced directors know that they need to think more widely than just limiting their thinking to the points highlighted by management.  It’s a starting point – a useful one.

Good practices to consider…

Give a quick history of what’s been discussed or agreed before and why, if it’s not a first discussion, it’s come back to the Board.  If it helps, think about inserting a hyperlink to a previous Overview and possibly to the relevant section of the Minutes.

Things to avoid…

Assuming non-executives can remember what has gone before.  Some might have excellent memories but it shouldn’t be assumed that all directors will remember that discussion six months ago.  NEDs aren’t in the business every day and a long gap since the last meeting will have been filled with many other activities and discussions.  It doesn’t take up much space to give them a quick reminder – but it will make for a better discussion.

Good practices to consider…

Summarise what management are proposing, or the position they are taking.  It helps the reader interpret the information and consider the different angles and the arguments.  A brief indication of the options considered and rejected might also help, giving the Board confidence that there’s been a full debate and also helping they themselves think through the alternatives and risks.

Things to avoid…

Again, leaving it to the reader to read the tea leaves, or at least between the lines.  And then only after the paper’s been read right through.  Management’s view (or its position on the balanced options) needs to be at the heart of the Board discussion.  So it needs setting out clearly in the pre-reading, right up front, so that the analytical thinking prompted by reading the paper can be put in context.

Good practices to consider…

If it’s “For Information”, explain why the Board needs to know, and in this level of detail, and how it fits with its role and responsibilities.

Things to avoid…

Sharing an executive-level paper (and all the detail that goes with it) without setting out the relevance.  Information for briefing’s sake is usually well-intentioned, sometimes justified and often not needed at all.  It’s helpful if management will give some pointers as to why the NEDs should pay attention to a paper, especially when it forms part of a 400-page pack.

Good practices to consider…

Call the introductory page an “Overview” or “What this is about”.  The title will encourage preparers to think of it the right way.  Yes, it should give an indication of the main headline messages, but it isn’t a summary of the paper as such.

Things to avoid…

Trying to make what’s called a “summary” a summary.  Usually, the goal isn’t to summarise the content of the paper (something which typically can’t be achieved in the space available).  It’s about positioning the paper so that the director understands what should be considered and what’s needed.  If the paper is so long that a summary of the content is needed to make it realistically readable, you’ve got a different problem.

Good practices to consider…

Include signposts to the paper itself.  The overview can only be the headlines, so some signposting will be needed to take the readers to where the points are expanded upon and properly explained.

Things to avoid…

Leaving the reader to look unaided for the material on the key points.  That’s especially hard if there’s a lot of detail in a dense paper.  It’s not only inefficient and frustrating but, more importantly, runs the risk that the reader gives up, or can’t spot the important point or explanation because it’s lost in the detail.

Good practices to consider…

Tie it into other relevant papers, or sections of other items being brought to the Board.

Things to avoid…

Letting the issue sit in a silo.  It won’t apply to all items of course, but where there is a link, draw it out up front so the reader doesn’t have to work it out for themselves.  Especially if doing that means they have to get through several other papers (and possibly several hundred pages) before they realise the connection.

Good practices to consider…

Provide a framework for paper owners to work to, making use of the points we’ve explained here.  That way authors know what to aim for and readers know what’s coming.  It helps to get directors into the right frame of mind for a good board meeting if their preparation is made easy for them.  Well-positioned papers help them to get the most out of their limited time (and, dare we say it, their limited attention spans).

Things to avoid…

Becoming slaves to templates.  There is a role for templates in ensuring a degree of consistency and in guiding authors of papers.  But make them too prescriptive and they run the risk of being filled in like forms, with standard content which has not been thought through.  Or worse, just carried over from the last time.  What matters is to help the paper owner understand what the positioning overview needs to achieve, rather than enforcing visual uniformity.

Good practices to consider…

Make sure there’s good spacing and use of line breaks, bullets and other techniques to set out the messages clearly.  If that means spreading on to another page, then so be it: better two pages that can be read and understood easily than one which dents the reader’s enthusiasm from the beginning.

Things to avoid…

Making everything fit onto a one-page summary by reducing the font size to a point of near illegibility.  Or compressing it all into complicated sentences and long paragraphs.  These common habits hinder rather than help.  Especially on a screen when the whole page is probably not visible, or expanding to get a bigger font means the reader can lose sight of the structure and flow.

If you would like to discuss how Independent Audit can help you develop the positioning of board papers, please contact richard.sheath@independentaudit.com.  www.independentaudit.com


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