The sacrosanct value of a well-compiled and timely board pack

“As a person who’s been on the board, it’s been a frustrating period of time when information was not flowing sufficiently. The Board Papers were coming very late. They were heavy on details and often the real message was embodied within the board paper itself, making it very difficult as a board to challenge the issues in a timely manner.”

This was an explanation given by Bank of Queensland (BoQ) Board Chair, Mr. Warwick Negus to shareholders who questioned BoQs risk failures that triggered enforceable undertakings with the Australian Prudential Regulation Authority and financial crimes watchdog (AUSTRAC) within the year 2023. The undertakings led regulators to appoint an external auditor and forced the bank to set aside additional capital.

The incident then begs the questions: What is an effective board pack and how can it aid the board in having visibility and oversight of systemic long-term risks to an institution? What role should Directors play to ensure they receive timely and succinct board papers to empower them to detect risks?

A Board pack is the primary source of information for Directors on the happenings of the company and would typically include an agenda, minutes of previous meetings as well as matters arising, CEO reports, performance reports and committee reports among others. The reliability and utility of Board packs are important for a successful board meeting as they ensure Directors are well-equipped to participate in discussions, provide inputs and make decisions. An effective Board pack can be achieved with a smart agenda, high-quality of board papers, timely circulation and leveraging on Board Committees.

Smart Agenda

The first step in achieving an effective Board pack is having a smart agenda which acts as a guide on the content to be included in the board papers. The agenda should generally not be too long to avoid losing the concentration of Board members hence ensuring their active participation throughout the meeting. Good practice is to have it prepared by the Company Secretary and cleared by the Board Chair who ensures that the volume of board papers is appropriate and matters of key concern have not been left out. The agenda should then be circulated to all board members to give them an opportunity to suggest amendments before the meeting. All amendments should be discussed and cleared by the Board Chair.

For better time management, the agenda should clearly indicate papers that require board approval, those for discussion and those that are for noting and suitable time allocated to each paper. More time should be allocated to papers requiring approval and those for discussion to allow for appropriate deliberation among board members. It is the responsibility of the Board Chair, guided by the Company Secretary, to adhere to times set and avoid the meeting duration going beyond the scheduled time.

Quality of Board Papers

Board papers need to be succinct and straight to the point, devoid of operational details. If a director is drowning in detail, they may miss the key message. The “ask” from Management to the Board, implications for the business and recommendations should be clear. Technical jargon should be avoided considering the diverse skills and qualifications of the Board members.

Performance and financial reports should provide a scenario of both past and future, including any challenges the management foresees and wants to bring to the attention of the Board so that all problems can be nipped in the bud.

If the board is not happy with the contents of the board pack, they must advise the management on additional information required, how it should be presented and a time frame when it should be circulated to the Board.

Directors should insist on board papers that are concise, clear and focused.

Timely Circulation

Timeliness is paramount and a time frame to submit board papers should be clearly spelt out in the Board Charter. A minimum of five (5) working days prior to board meetings allows for adequate review and preparation, ensuring Directors come to the meeting with a clear understanding of the documents. Directors in turn should commit their time to read the board pack and anticipate issues fostering a proactive approach to risk management.

Leveraging on Board Committees

Board Committees delve into specific delegated board duties and provide reports to the full Board. Leveraging committees helps the board members reduce the amount of time and details to review and discuss during the full board.

Ultimately, when it comes to corporate governance and oversight of a company’s future on behalf of stakeholders, the buck stops with the Board. They need to demand and promote excellence and one way of doing this is to ensure they get the right information from management through well compiled and timely Board Packs.

As seen from the BoQ case, the risks can be high if this is not adhered to.

This is a guest blog which contains the views of the author and does not necessarily represent the views of the IoD.

About the author

Kahumbya Bashige,

Governance and leadership expert

Kahumbya is a chartered director and a seasoned professional in governance, development finance, fundraising, commercial banking and corporate finance.

She is an elected member of the Council of the Institute of Directors, a body that acts in an oversight and advisory capacity of the Board to ensure the delivery of the objectives of the Institute. She is also an Independent Board Member and Chairperson of the Audit Committee of CRDB Bank Burundi S.A. and sits on the Advisory Board of SESDCorp. She has extensive international experience having worked for four different multinational institutions namely Citibank, Deloitte and Touche, African Development Bank and Shelter Afrique.

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