The board of directors in any organisation is responsible for its operational, strategic and financial performance, as well as its conduct. It is worth remembering that boards require both financial and non-financial information.
The pressure for multi-dimensional reporting is likely to increase further with change in the business scenario. The scope of information flowing through the company to the board, and then from the board to the investors, will have to be broadened.
Companies need to ensure that they have systems in place that can generate and collect such data, as well as processes and people capable of analyzing and presenting it to the board, and then to the markets, in a meaningful form.
Reports should always be written clearly and simply. Everyday language should be used wherever possible and jargon or acronyms should be avoided. Used judiciously, graphs and charts can be an effective communication medium for key indicators. They also enable trends to be identified more easily.
Given below are key points most Monthly Board Reports contain.
You should highlight any major milestones achieved during the month in this section. This may include booking a new sale/order or winning a strategic client. A good report should contain all the information necessary to facilitate decision-making at board level. It should lead directors to ask the right questions and initiate a chain of actions that will enhance the ability of the enterprise to achieve its short- and long-term aims and create sustainable shareholder value
This should include data such as current month financials performance vs budget/prior year, review of financial forecast for entire year, sales gap and pipeline review, financial results by SBU etc.
Below can be an indicative list of financial information which needs to be part of Financial Results section
Monthly board reports should contain performance information relating to key operational issues as defined by the board: the critical success factors (CSFs) and key performance indicators (KPIs). The board and management should agree the high-level KPIs to be covered in the report. Management should be able to drill down from high-level indicators to examine the underlying cause of a problem and identify appropriate action.
Check our detailed blog on how to set KPIs for your organisation.
You should always keep your board informed about hiring/on-boarding of key management personnel or attrition of a key person which might impact the organisation. You should also give details about the pending positions to be hired and how critical are they for the future growth of the company.
While you are on a growth trajectory, there will be multiple strategic projects eg. fund raise, expansion into new areas etc. You should ideally give a monthly update on these to board.
Some examples are given below :
Certain boards might be interested in functional performance. It can be R&D or Sales. It is important to identify key performance indicators which explain functional performance. This is very important if your Boards are detailed oriented. You might need to cover each function with their respective milestones. Some examples are given below :