Is the board getting and using the right information?
‘How do we know our chief executive is telling us the truth – all the board reports sound positive – but it doesn’t seem right to me?’
Board member of an association shortly before it received zero stars and plunged into supervision
‘We embarked on a huge strategic review. By the end of it we had no business left.’
Housing association executive in the late 1990s when they failed to notice demand collapsing in the north
Concentrating on the wrong data spells disaster for all businesses. The board of Northern Rock boosted executive pay just before the crash that led to nationalisation. Sales looked great but they missed the credit crunch that robbed the bank of its ability to keep running. Likewise, when Rolls Royce was nationalised in 1971, the directors were caught off guard because the cost of research was counted as an asset in the books. It came as something of a surprise to realise the money was not there to develop much-needed new jet engines.
How time gets used in the boardroom really matters. Too often we see boards ploughing through enormous and tired agendas – that don’t pick out the things that really matter. Squandering time leaves insufficient room for the big deals - like should an ALMO stay in the subsidy regime, or should an association merge?
- Who is involved in setting the board meeting agenda? What input do you have? Do the right matters get chosen?
- Are all reports to the board for decision? Are too many reports for information clogging up proceedings?
- Are the pros and cons of options in board reports succinct, well argued and accurate?
- Are reports well presented in writing and at meetings?
- Can board members easily get hold of background information to help with understanding reports and performance information? Are previous reports available over the internet?
- Is the board deluged with performance information – or are the key areas for attention singled out? Are you data-rich, analysis-poor and action-poorer?
- Are board reports taken in order of priority? Is enough time allocated to important matters where the board can make an impact?
- Which item at the last board meeting stimulated the most debate? What happened next? Did the board make a difference?
- Does the board have a meeting with the external auditor without the presence of senior officers?
