HR & Management
Board meetings: Don't get bogged down in the detail
3 min read
13 June 2014
Financial scrutiny is an important role for boards to perform but meetings need to focus on the big picture.
An important part of the role of executive board members is to communicate financials and other performance measures to the board.
But it’s crucial that board meetings don’t simply involve a drawn-out discussion of figures. Board packs should be distributed in advance of meetings so that members can digest the information and there’s no need to go everything once the meeting itself arrives.
Nick Bacon has served on more than 20 boards and holds a number of non-executive directorships.
He says a key skill for chairmen and NEDs is to pick out the key themes that run through the figures and bring these up for discussion.
“There is a limit to what you can do about what’s already happened,” he says. “The more important debate, I always think, is about what does that mean for where we’re going.”
“Board meetings can run into a trap of going through the reports one by one with the person who wrote them leading the discussion – that’s not great for a good meeting.
“NEDs need to be thinking, where do we need to be looking out for warning signs or opportunities that are being presented?
“The best non-execs start the meeting by taking the reports as read and saying, ‘I only want to focus on these issues because they underly all of the reports. That way you are hopefully focusing on the key issues that matter rather than getting bogged down by the minute detail that isn’t adding value.
When it comes to information flows it’s also important for the reports themselves to be focusing on the key information which non-execs really need.
Roger Barker, head of corporate governance and professional standards as the Institute of Directors, says that non-execs need to take the lead in getting the right information they need to do to the job properly.
He says they should “seek a diverse insight into how the company is doing so that ultimately when you are in board meetings you can ask the right questions and truly understand the prospects of the company and how the management is performing.”
Reports from the CEO and FD will only tell non-execs what the management team thinks is important information, rather than necessarily painting the bigger picture.
Barker says: “The most important thing is that the board defines its own information needs. If it is simply passively accepting what is being given to it by management then it is putting itself in a position where it’s not really going to be able to have an independent view of the company.”
He adds that management teams shouldn’t “just dump hundreds of pages of reports which you are using as as management which are going to be totally insurmountable for [non-execs] to understand and read – actually tailor the info to what [they] need and can digest.”