5 Steps to Board Meeting Enlightenment in PE-Backed Companies — Part Ⅲ

Board & management papers

3 min read

Step 3: the CEO’s Report is not a press release

Portfolio company board meetings consume time and energy, but for many board members and management teams they don’t add enough value. In this series, we share ways of breaking this unproductive cycle. So far, we’ve recommended rewriting the agenda and breaking the monthly board habit. This article looks at the critical role of the CEO’s report and why it is failing its stakeholders.

“A good CEO’s report is key to being able to see what matters.”

~ Bill Priestley, Chief Investment Partner, Epiris

Our research has found that more than 50% of PE investors believe the CEO’s report to be the critical paper in the board pack. So, when a board member picks up a board pack, it’s often the CEO’s report they turn to first. That’s when the disappointment starts…

The CEO’s board report is often a direct reflection of what they think of their board…

The mistake many CEOs make is to write their report with the wrong objective in mind — reputation management and board control. For these CEOs, the report’s function is to enable them to get through the board meeting and back to running the business as painlessly as possible. The way they write their report is symptomatic of the value they think the board can deliver.

“I’ve read CEO’s reports that are like reading the words of a First World War general — they’re a propaganda exercise.”

~ Mid-market investor we interviewed for our research

Discounting the board’s usefulness is a mistake in itself, but even as far as reputation management techniques are concerned, the good-news report is a flawed strategy: nothing makes a board member more likely to go hunting for bad news than good news (or carefully curated bad news!).

…and its absence is a missed opportunity to steer

Worse still, in over 25% of organisations we surveyed, board members reported that they didn’t always see a CEO’s report in their board pack.

Aside from the governance risks such an omission can create, not sharing a report with the board — or writing a bad one — means the CEO is missing a potentially game-changing opportunity to focus the board on growth and value creation. A board meeting without a high-quality CEO’s report is like a rudderless ship: its direction is determined by the various interests of the board members, not shaped by management to focus on what will add the most value.

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What’s the solution?

Start by seeking guidance from the board. What are the questions your board members are looking to you to answer in your report? More often than not, the first question will be “what’s keeping you up at night?”, so start with this — and share an open, honest account of what’s on your mind. Once you’ve scratched this itch, you have the board’s attention — and you can shape the conversation to focus on the topics or decisions that matter most.

“You want to get inside the CEO’s head and see the world from their angle… that’s where you start off from.”

~ Patrick Reeve, Managing Partner, Albion Capital

But answering that question alone isn’t quite enough:

  • Keep it brief — no more than 2–3 pages;
  • Write it yourself, and in the first person — be personal and accountable. If you’re time-poor, get someone to interview you;
  • Share insight, not detail — focus on material developments and explain the implications;
  • Tie it all back to the business’ big-picture goals;
  • Have a clear ‘ask’ of the board so you get something back.

Follow these simple guidelines, and you’ll produce a report that enables your board to add real value for the benefit of all stakeholders.

The next article in this series will look at providing management with the right briefs for their papers.


The 5 Steps to Board Meeting Enlightenment in PE-Backed Companies

In case you missed any of the steps in the series, you can find them here:

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