Reports by Directors for Directors

Most of the available advice about how to improve reports for the board of directors is about content from the senior management team – reminding us that, even though it’s easy to point the finger at management for voluminous reports that are painfully dense, the board itself is accountable to ensure it receives the information needed to fulfill its role. If you, as a director, aren’t happy with the form, length, style, and content of your board’s management reports, go ahead and raise the issue. Others on the board are probably thinking the same thing.

But today’s edition of The Savvy Director blog isn’t about reports from management. It’s about reports written by directors for directors.

Board committee reports are the most common example. Committees – whether standing or ad hoc – are accountable to the full board and must report back regularly. Committee reports, usually written by the committee chair, are typically included in the board package, although some boards make do with an oral report.

Committee reports serve as a communication tool to update the full board of directors on the work of the committee, and to put forward recommendations or motions that will be discussed at an upcoming board meeting.

A well-written committee report sets the table for quality board discussion and allows directors to make the most of the limited agenda time available.

Why Committee Reports?

Committees contribute to board effectiveness because they allow a smaller group of directors to spend more time, conduct a deeper dive, and bring their particular expertise to bear on what’s before them. By delegating some of its work to committees, the board quite simply gets more done.

The board depends on its committees to do their work and do it well. But that doesn’t relieve the full board from knowing what’s going on within its committees. That means committee reports are more than just a formality. They assure the board that committees are doing their due diligence and fulfilling their mandates.

Committees typically don’t have the authority to decide on behalf of the board – they can only make recommendations for the full board to consider. Done well, committee reports ensure that every director on the board – whether they sit on the committee or not - has the same information upon which to base a discussion. They enable directors to go the last mile toward a decision, knowing the committee has delved into the detail.  

“Most boards take in their information by reading and use the meeting to discuss the information and ensure that all board members have reached the same conclusions. It is thus vitally important that boards be given good written information before, during and after the meeting.” – Julie Garland McLellan, FAICD

Reports vs. Minutes

So, why ask for committee reports if committee meeting minutes are available? These two types of documents are not interchangeable and have different purposes.

Minutes serve as the official record of everything that happened at the meeting, from the call to order to adjournment. They’re vital from a legal, record-keeping point of view, but they can’t exactly be called engaging.

Committee reports, on the other hand, should highlight the most important issues emerging from the committee’s discussions, focusing on material judgements and big decisions being considered. That makes them more interesting and relevant than the minutes, especially if the author resists the temptation to make their report a blow-by-blow account of each item on the committee agenda.

Including written committee reports in the board package is especially useful to the board members who aren’t on the committee and weren’t privy to the in-depth discussion. A well-written report helps them prepare for the board meeting by providing food for thought and addressing some of the questions that otherwise might take up valuable time.

The Desired Outcome

According to board governance expert Julie Garland McLellan, FAICD, board reports should always be written to achieve a desired outcome.

I reached out to Julie for some additional perspective on writing committee reports. In addition to running a global advisory practice from Sydney, Australia, Julie is an experienced professional company director with a real-world view.

By the way, one interesting note about vocabulary. In Australia as in many parts of the world, the board’s pre-reading material is often referred to as the board’s papers. In North America, we’re more familiar with the same content being referred to as the board ‘book’, ‘board pack’ or ‘board package’. All can be used interchangeably. Go with what works for you.

Julie says, “The paper must be written to generate the desired outcome. This does not mean that the board should be manipulated by careful selection and editing of the information included in their papers, although that does sometimes happen.”

Desired outcomes for board committee reports include these four:

1. For noting – a report with information the board needs to discharge its duties.
2. For information – a report with information that would be useful or nice for the board to have but isn’t required for an immediate decision.
3. For decision – a report calling for the board to make a decision based on the information included in it.
4. For discussion – a report about an issue on which the board needs to reach consensus and form a shared opinion, even though no decision is required at the time.

Many times, the desired outcome is not formally identified in the report - directors are just expected to understand what’s required. To avoid this, Julie recommends – and I tend to agree - starting the first sentence with words such as, “This report calls for a decision upon the awarding of a contract ...” or “This analysis will be discussed at the meeting.”

I’ve seen many examples over my time serving on boards. Here are two examples I’ve seen work well:

• The X Committee met on (date). Following is a brief summary. For full details, please refer to the draft minutes. There are no recommendations for approval by the Board at this meeting.
• The X Committee met on (date). Following is a brief summary. For full details please refer to the draft minutes. There are three recommendations for approval by the Board at this meeting.

The written reports are included in the board package, providing directors a heads-up about whether or not board decisions will need to be made based on the committee’s recommendations. That’s where the real value come from – getting everyone on the same page, ready for a robust board discussion.

When the agenda item comes up in the board meeting, the committee chair provides a short oral recap to set the stage for discussion and questions. This recap doesn’t involve reading the report aloud. Instead, it should focus on any items with a desired outcome of either a board decision or a full board discussion.

When the committee chair reports with enthusiasm, the rest of the board will receive the update with the same energy. Hearing about the progress being made keeps the entire board on track towards its goals.

Board Committee Report Templates

It’s not uncommon for organizations to use a customizable template for board reports. Templates add clarity, understanding, and speed of reading. With regular use, board members become familiar with the template and can focus quickly on the key points.

There’s no single right way to design a template or write a board report. A format that works for one board may not work for another. If you’re new to the board and tasked with writing your first report, ask to see an example of a past board report that worked well. It will give you some idea of the board’s preferred style.

There’s nothing wrong with introducing an improvement you’ve seen used in another situation. Just be careful to avoid saying, “Well when I was on the XXX board, we did it his way…”  That just invites resistance to a good idea.

The BoardEffect article Board Report Template and Outline by Jeremy Barlow outlines a sample board report template that you can use as is or revise for your particular situation. Here are the elements listed in the article:

• Name of committee
• Name of committee chair
• Names of committee members
• The objective of the committee
• Summary of recent accomplishments and current activities
• List of activities in progress and upcoming events
• Financial impact
• Dissenting opinions
• Recommendations to the executive director or CEO
• Recommendations to the Board of Directors

For longer, more complex reports, you might try using an Executive Summary format with appendices. All the information needed for the decision should be in the main body of the report, as directors don’t always read the appendices.

On some committees, there’s a support person who takes notes during the meeting and drafts a report for review by the committee chair. But if you’re writing the report yourself, it’s best not to rely on your powers of recall to compose the report after time has passed. Instead, take a few notes during the meeting, commit to brevity, outline the action items, and proofread the report. Shred your notes when the report is finished.

Cross check your report with the meeting minutes for accuracy and anything else you may wish to expand on. Remember, the minutes should reflect the due diligence of the meeting while the committee report expands the narrative to support board discussion and decision-making.

Oral Reports

Many boards don’t require written committee reports – perhaps your board is one of them. This might be due to timing – if committee meetings are held immediately prior to the board meeting, there’s no time to draft a written report, and draft committee meeting minutes are probably not available either.

Sometimes, even if there’s a gap between committee meetings and the board meeting, written reports are still not expected. Personally, I’m not in favor of that approach because it doesn’t allow board members an opportunity to prepare.

Whatever the reason, if there’s no written report in the board package, the onus falls on the committee chair to deliver an oral report that allows the board to satisfy itself that the committee is fulfilling its mandate, receive important information that the committee has reviewed, and consider committee recommendations for decisions.

If you’re called upon to deliver an oral report to the board, it’s best to have prepared notes in front of you. These notes should hit all the same highlights that would have appeared in a written report, with emphasis on important discussions and recommended decisions. Since it’s unlikely you’ll have draft minutes to rely on, make sure that your note taking during the meeting is aligned with what you’ll want to report on.

Your takeaways:

• Keep in mind, the purpose of a board committee report is to communicate to the board for the purpose of a desired outcome – noting, information, decision, or discussion.
• Using a board report template provides a guiding structure for both writing the report and facilitating its understanding by the reader.
• There’s no one right way to write a board report. Look for examples of previous reports that were well received and augment where you can add value.
• Begin each board committee report with a clear statement of what it’s intended to achieve.
• Developing your communication skills to deliver concise reports - written or oral - adds to your positive reputation as the kind of director boards want.

Resources:

• Julie Garland McLellan, FAICD. LinkedIn.
• How to Write a Board Report. Adam Wire. Onboard. January 2022.
• How to Write an Executive Summary for a Board Report. Carissa Duenas. Praxonomy. July 2022.
• A Board Report Guide and Template. Sean O’Neill. © 2023 Corporate Governance Institute.
• How to Write a Report to the Board of Directors. Jeremy Barlow. BoardEffect. June 2021.
• Committee Reporting. Richard Sheath. The Effective Board. April 2018.

Thank you.

Scott

Scott Baldwin is a certified corporate director (ICD.D) and co-founder of DirectorPrep.com – an online membership with practical tools for board directors who choose a growth mindset. 

Originally published July 23, 2023 

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