Data plays a crucial role in board and management information – but with an ever-increasing volume, how can you focus on delivering insight in the boardroom? Paul Mumford, Engagement Manager at Board Intelligence, shares four tips that will help you deliver concise, insightful data efficiently.
As the custodian of the majority of data within an organisation, the challenge of producing board reports that cover the scope of information needed without drowning the reader is felt most keenly by CFOs. Here are some of the most common challenges we hear:
Board reporting can feel like fighting an uphill battle – with ad hoc requests coming in each meeting and the board pack growing longer and longer as a result. The burden of producing this extra data often falls to the CFO and Finance team. And as we know, management information doesn’t grow on trees – extra time spent producing reports means less time running the business.
A misalignment between the information produced for the board and the data used by management creates an extra burden and duplicates the effort needed to produce the reports. And, chances are, data that isn’t being used to run the business probably isn’t needed in the board pack.
Providing the full scope of data needed by the board can often mean that the key messages get lost, resulting in the classic “I can’t see the wood for the trees” complaint. This mass of information can make it difficult to see whether the business is creating value, where it is over or under performing, and what management can do to influence it.
Here are four simple steps to help you produce insightful reports that tick the boxes for writer and reader alike.
A dashboard should provide a holistic snapshot of the business at the highest level, capturing the key outcomes that the business is looking to achieve. This should act as a signpost for where the business is doing well, or struggling, with each section then being unpacked within the reports that follow.
When creating a report, most people naturally start with the data they have available or the data that’s been requested by the board, in the hope that each additional table or chart provides the information the board needs. The result is data that covers everything that management knows, but leaves the reader to find the key facts that they need to know.
Instead, to provide the information needed in a succinct way, start by identifying the questions on the mind of the reader and then provide data to answer each question in turn. When a board member asks for additional data, it is because a question on their mind is currently unanswered. Focus on what that question is and you may find a better way to answer it than by providing more data.
And don’t try to answer multiple questions in a single chart. This leaves the reader having to pull out the story for themselves, rather than having the “so what?” set out for them in a clear and logical fashion. Equally, don’t include data that doesn’t directly answer one of the questions identified – if it’s not answering a question on the mind of the reader, or you don’t use it to run the business, then it shouldn’t be in the pack.
Including the actual data is only part of the insight the board needs. All data should have a comparator – either a plan or a historical value – to add context and meaning. This provides the reader with the “so what?”, helping them understand where you are over or under performing, and what action is needed to address this.
One of the most common causes of gaps in a board pack is not having the relevant data (or it being too costly to produce). But a lack of data shouldn’t limit your ability to answer the questions that are necessary. Instead, ask yourself what measures can help to provide that insight – even if it isn’t perfect, it can still act as a proxy. If that doesn’t work then consider providing narrative instead. Just don’t leave the question unanswered or you will no doubt have to answer it in the board meeting.
Following the principles outlined above can help you provide concise and insightful data that answers the questions on the mind of the reader. By focusing first on those questions, and then using data and comparators to answer them, you will find your reports become shorter, more insightful, and focus on the key drivers of performance that you monitor day-to-day.
At Board Intelligence, we understand the challenges CFOs face in trying to provide the breadth and depth of information needed – but efficiently and succinctly. We have reviewed hundreds of board packs and have developed a suite of data tools and templates to enable companies to achieve a step change in the way they use data in their reports in just a few days. If you would like to find out more about how Board Intelligence can help you develop effective MI reports, please email Paul.