How to prepare professional board reports

Preparing effective board reports cannot be underestimated in the ever-changing and dynamic business world. They’re not only essential for communicating financial performance and operational progress, but they’re also an all-important part of strategic and intelligent decision-making.

The process of compiling a board report can take weeks – even months. It requires skill to know what information is essential and how to present it simply and engagingly for board members in advance. But, with the right tools and systems, you can produce well-crafted reports quickly and easily – and help keep your organization moving in the right direction.

What is a board report?

A board report provides an overview of critical business information, including company performance, financial health, strategic initiatives, and potential risks. It’s a reference document, usually presented to board members before a board meeting, to ensure they have the necessary information to fulfil their governance responsibilities, have informed discussions, and make smarter decisions.

The two types of board reports

There are two common types of board reports: CEO and HR. While both should cover current and upcoming projects, they focus on a distinct area, giving the board a more in-depth understanding of the organization from different perspectives.

CEO report

The purpose of a CEO board report is to provide a financial breakdown and review, along with any significant updates on company goals and operational objectives.

Human resources (HR) report

On the other hand, an HR report discusses hiring and employee turnover, diversity and inclusion, and employee satisfaction and engagement.

The role of board reports in board meetings

During a board meeting, the chairperson will introduce the board report and highlight the most noteworthy parts of the report, including any pressing or important issues. Board members then discuss the report in more detail.

What is the purpose of board reporting?

A board of directors relies on past and present information to make decisions about an organization’s future. Board reports are an effective way of communicating those statistics and intelligence and facilitating in-depth analysis and debate.

The purpose of a board report is to:

1. Keep board members updated
   The primary purpose of a board report is to inform board members of the progress and performance within your organization.
2. Encourage questions and discussion
   Board reports catalyze meaningful debate, encouraging board members to question and analyze the information – and provide guidance, advice, and sound decision-making.
3. Hear committee reports on assigned tasks
   Part of being a board member is joining board committees that match your knowledge and expertise. These committees meet, research, make recommendations, and provide summaries to include in the board report for deliberation.
4. Outline strategic plans and goals
   A core part of a board report is laying out the future roadmap for an organization – like strategic plans, operational targets, and business initiatives – giving the board a clear insight into business operations.
5. Celebrate achievements
   Board reports are an opportunity to celebrate progress and recognize the collective effort of everybody within your organization.

Why are board reports necessary and important?

The frequency of board reporting depends on how often your organization’s board of directors meets – this may be monthly, quarterly, bi-annually, or annually. Because board reports are a necessary and important part of a board meeting, in most cases, they’re produced on a similar schedule, at least one week before the meeting, so members have time to digest the information and connect with their own research and knowledge.

What information do you include in a board report?

Your board report should align with your organization’s specific needs and priorities. That said, there are some core elements that every well-thought-out board report should include:

Executive summary

An executive summary is an overview of the most critical information in the board report. It helps board members understand, at a glance, what the report’s key points or findings are. You should aim to provide a balanced view of successes and roadblocks so board members can make a realistic and informed assessment – without reading every page.

Financial performance

Financial reports make up a significant portion of a board report. Not all board members will be familiar with reading them, so adding brief narratives that explain the nuance and sentiment behind the numbers will help keep everyone on the same page and thinking about the big picture (rather than all the little details).

Most boards will need to review the following:

• Financial metrics
• Balance sheet
• Income statement (Profit and Loss)

• Cash flow projections
• Budget updates or new budgets

Operational updates

Describe how day-to-day operational activities connect to the organization’s strategic goals and what initiatives are in place to support progress in the right direction. This section would typically cover key operational metrics such as efficiency rates, production volumes, and process bottlenecks.

Future-oriented analysis

To stay competitive today and tomorrow, boards need financial forecasting. Instead of focusing on benchmarking current performance, they need to be able to leverage real-time data to predict and understand what the future might look like, for example, emerging trends, risks, and opportunities.

PRO TIP: Use a combination of text and visuals.

Board reports must be as engaging as they are accurate. Whether your board report is one or 50 pages long, using bullet points, graphs, tables, and images will help make the content more digestible – and ensure members grasp the key points.

The roadblocks to good board reporting

Board reports are critical to decision-making but can be equally time-consuming and challenging for many organizations. There are lots of reasons that leadership teams struggle to compile effective board reports – missing information, messy structure, lack of clarity – but often that all stems from manual reporting and disparate systems.

Good board reporting relies heavily on accurate, real-time information. Different teams are likely responsible for pulling and analyzing specific reports. For example, your finance team will oversee financial performance data and budget numbers. They need to be able to find and extract that data efficiently, particularly when reporting on a monthly basis, but that can be a cumbersome process if they’re consolidating data from multiple systems. This is where manual processes significantly slow progress and increase the chance of mistakes or inaccuracies.

The flow-on effect is that board reports become static or stuck looking backward. While board members will consult historical data during their decision-making, accurate forecasting and future-focused strategies are more informative.

Using BI and FP&A software to improve board reporting

With the right tools, you can accurate, timely, and insightful reports that are engaging and help board members make informed decisions.

A business intelligence (BI) platform is beneficial for data consolidation, validation, and automation purposes. It’ll centralize your data from your ERP and other data sources so that you can trust your teams are using the most up-to-date and reliable financial and operational data straight from your ERP.

To optimize the board reporting process even further, a BI platform with Financial Planning & Analysis (FP&A) capabilities will streamline and speed up the financial reporting aspect. It will also help you set-up a board report template, customized for your company.

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Phocas software is a robust BI and FP&A platform designed to help manufacturers, distributors, and retailers prepare financial statements for board reports. You can customize reports to meet your specific requirements, build dashboards and charts to make at-a-glance insights accessible to everyone who needs them, and those with log-ins can drill down further into the transactional detail. External board members can access reporting via PDF.

Accurate board reporting every month.

Providing the board with accurate reporting takes a lot of teamwork across different business functions. Using BI and FP&A software, you can create board reports that help board members make the best decisions for your organization while saving yourself and your team time.