A Board Pack is a set of documents which contains crucial information the board ought to be kept updated on such as financial position of the company, progress plans, etc., which is used to guide upcoming meetings. Essentially, it is a toolkit that enables accurate decisions, assessment of risks and solution-focused discussions that shape strategic direction. An organized, easy to review board pack contributes to the proper governance of an organization.
A board pack is used to:-
- Foster a common understanding among all members of the board to lay the foundation for strategy formulation at the meeting;
- Ensure the board stays up to date with key information relating to the organization such as its financial standing;
- Update the board on any pertinent progress since the last meeting;
- Induct the board; and
- Promote good governance of an organization.
The structure and format of board packs vary from company to company. However, the basic components that cut through a majority of them are:-
- Cover page having the name of the organization and purpose, date, time and venue of the meeting;
- Agenda of the meeting;
- Minutes of previous board meeting for approval and matters arising;
- A CEO update on the company’s operations and significant events since the last board meeting;
- Management reports, e.g. financial reports, compliance reports, CSR & ESG reports, project reports etc.;
- Supporting information related to decisions being made during the meeting; and
- Items of important board correspondence.
In order to prepare a well-structured board pack, one should:-
- Focus on quality, not quantity since overloading directors with too much information derails their attention from things that are actually relevant to their strategic functions.
- Make use of templates in order to minimize the number of words and page counts as this ensures only the most relevant information is included in the board pack and directors become familiar with the way information is presented.
- Set firm deadlines for submissions. Late submissions, additions and changes create administrative hassles and lowers the amount of time directors have available to analyze information.
- Use a clear and logical structure for easy navigation, for instance, numbering each section, adding a table of contents and links between the agenda and related documentation for digital board packs.
- Ensure you slot in an ample timeframe to allow for a thorough evaluation by the Chair and CEO, and to accommodate any necessary changes.
- Engage the board in determining the Key Performance Indicators (KPIs), such as financial and non-financial metrics that they would like or need to see in each board pack.
- Employ board portal solutions or board management software to deploy digital board packs. In addition to saving the inconvenience of hauling around bulky, overwhelming amount of documents, digital board packs are also far more economical and secure. Updates can also be made quickly to give directors access to the most recent data.
A challenge that comes with the development of a board pack is that if it is presented in hard copy, it may to run thousands of pages therefore causing financial constraints that may impact the company’s performance, harm the environment, and cause a hindrance of the company’s CSR and ESG responsibilities to preserve the environment. On the other hand, introduction of digitization has eliminated physical size restrictions, but it hasn’t streamlined the amount of information directors get thus may lead to directors being weighed down by unnecessary information.
A Board Paper is a briefing material or document presented to directors during board meetings, to enable them make informed decisions as relates to the organization.
It serves the following functions:-
- It is an important source of information for board members;
- It complements the minutes to form the official record and audit trail;
- It induces deliberation and includes sufficient facts to aid that discussion; and
- It is used to ask the board to make a decision.
To prepare an effective board paper, it is recommended for one to:-
- Draw the board’s attention to the matters at hand by highlighting and summarizing the key matters without using too much detail;
- Avoid use of jargons and complicated word structuring;
- Issue board papers beforehand to allow members to prepare ahead of time, thus ultimately saving time when the meeting kicks off;
- Use concise and explained graphics such as charts, tables and dashboards;
- Make use of templates and standard formats to determine what is relevant in a board paper and what is not;
- Involve managers and other key stakeholders in the preparation process;
- Ensure you gather the information the board will need by engaging in prior informal conversations with a few of the board members; and
- Develop a board paper policy to guide board paper writers.
A board paper consists of:-
- Board resolution: This is the decision you want the board to adopt. Although this is simply a draft, it should be prepared so well that the Board can accept it as is.
- Executive summary: Written in a brief paragraph of not more than 5 lines, aim to clearly state the purpose of the Board Paper, including whether it is to provide information solely, spark discussion, or seek a decision.
- Recommendation: It is critical that you make a very specific and succinct suggestion to the Board as the author of a Board Paper. Essentially, you are advising the Board to adopt the resolution and make the decision by highlighting the justification for the Board’s acceptance of the recommendation, a list of the alternatives, where applicable, and an explanation of why the suggestion is the best approach.
- Background: Board members’ understanding of the organization’s intricate operations must be taken into account because they often do not work there on a daily basis. A board member should be able to grasp the resolution and form a viewpoint about the best course of action based on the background information in the section.
- Issues: They are overarching aspects that may influence the board’s proposal, which the board should be aware of before making a decision.
- Risks: These are issues which could have a significant impact on the desired outcome. A lot of consideration should go into determining the potential hazards and the best way to handle them.
- Consultation: This section contains information on persons involved in creation of the Board Paper. It is a guarantee that all stakeholders were involved in the process.
- Financial summary: This component is necessary only if the decision to be adopted will have an effect on the organization’s finances.
- Alternative analysis: A solid alternative analysis is capable of bringing to light other approaches capable of attaining the same or related result.
To prepare a systematic and board pack and board paper, a governance professional ought to have the following skills:-
- Project management skills;
- Sound management;
- Good communication skills.
