The importance of accurate and effective board reporting is of immeasurable worth in the modern-day corporate world. Companies like PwC have concluded that the performance of a board increases significantly due to better board reporting. That said, accurate information and easy access to data help boards make more strategic and well-informed short- and long-term decisions.
However, companies also have to go through a lot of challenges that induce mistakes from the boards, especially less-experienced boards. In the text to follow, we will mention:
- Importance of board reporting in the modern-day corporate world
- Common mistakes in board reporting
- How technologies like board management software can make board reporting more effective
Importance of board reporting in corporations
1. Reporting helps non-executive board members understand the company better
Executive board members and CEOs may choose non-executive board members specializing in different business fields. For instance, CEOs may hire assistant directors to guide them about a new potential venture. Board may also hire fundraisers to raise capital.
It doesn’t matter how skilled, energetic, experienced, smart, and collaborative the non-executive members are unless they don’t understand the context. That is because they are usually hired on a temporary basis and don’t have a clear idea of the day-to-day operations of the company.
Only contextual and efficient board reporting can help those non-executive members understand things with ease. In return, they will be able to serve you better.
2. Reporting keeps the board members on the same page
It is easier to understand that managing a larger corporate board is more difficult than a smaller one. It becomes difficult to keep them on the same page, especially if the CEO or president do not give them direction. The number of conversations will increase if the board members have to talk to each other individually, and this will make meetings unproductive.
The best way to refrain board members from doing that is by giving them a direction for their discussions. A board report highlighting important and fewer topics to discuss will keep them busy in productive discussions.
3. Board reporting helps gain and build trust
It is impossible for the CEO or president of the board to make major or day-to-day decisions without gaining the trust of the board members. However, that trust will be short-lived without any accountability for actions, and the results come from those decisions or actions.
Consistent reporting is one of the best ways to keep everyone accountable. The CEO can set an example by reporting constantly and asking the board members to do the same. One way to do this is by using a board portal as a way to optimize board governance, organize virtual meetings, and keep everyone up-to-date on the latest developments.
What is a board portal?
A board portal or virtual boardroom is a paperless, digital board meeting management solution that simplifies communication between the board members and other senior and mid-level officials in a company.
Virtual boardroom software primarily assists boards in three major departments:
- Board meeting management
- Board document management
- Corporate dealmaking
You can also read more about board portals at https://boardsoftware.net/shaparency/. The platform contains in-depth board portal reviews and comparisons.
How can board portals improve board reporting?
Here is how board portal software helps companies overcome those challenges mentioned above.
1. Central board document management
Board portals are cloud-based platforms that boards can use for central document storage. That means the board packs, financial statements, manuals, annual reports, and other board-related stuff are available on one platform. Board members will know where to look for any document.
2. Customizable templates
Virtual boardroom software has tons of free templates for different documents. For example, you can have templates for board books, meeting agendas, meeting minutes and notes, legal documents, financial statements, board reports, due diligence checklists, etc.
3. Meeting management tools
Board management software comes with a wide range of tools for effective board meetings. Using these tools, you can automate your meetings from A to Z.
For example, you can easily prepare a meeting agenda, get it signed by the chair or CEO, and share it with expected participants. Board members can start motions, and other members can cast online votes to approve or reject proposals.
Similarly, the board secretary can take notes and meeting minutes and share/archive them for future use. Users in the boardroom can sign documents online, minimizing the need for paper documents.
Common mistakes in board reporting
Even after regular board reporting, many boards fail to achieve desired outcomes during board meetings. Here are some mistakes the boards/reporters make while preparing reports:
- Key messages do not stand out as the members often bury important information in a cluster of words.
- Board packs are often too long without proper summaries of important documents.
- Reporters have minimal or no formal training to write effective reports.
- No standard template for board reports which makes it difficult for board members to know where to look for specific information.
- Vague or no call to action in the reports. Board members often don’t even know what is expected from them.
- Inability to circulate board packs timely. It leaves members with insufficient time to prepare for board meetings.
- Inefficient feedback methods in the boards make it impossible for the board members to share their feedback on the quality of the reporting.
Final words
Efficient board reporting helps non-executive members understand the company better, builds trust between the board members and keeps board members on the same page during board meetings.
Virtual boardroom software can help board management in overcoming the challenges they face in arranging effective board meetings while avoiding the most common board reporting mistakes and maximizing the value of overall board governance.
