Just as our bodies crave sugar, our boards crave information. Medical research is constantly warning us of the perils of sugar, saying that too much of the stuff can cause diabetes, heart disease, even a coma. Can the same be said for information, with too much actually damaging a board’s effectiveness in the boardroom?
We live in an era where big data is an unavoidable part of modern business life, and our capacity to produce it in increasing volume shows no signs of abating. In 2012, IBM claimed that 90% of all of the world’s data had been produced in the previous two years. For management teams and boards, this means having access to unprecedented amounts of information. And just as it’s tempting to devour the entire pastry tray on offer, the temptation with board packs is always to include or ask for every report and graph that’s on offer.
But how effective is this — is more better?
Excess board information, like excess sugar, is addictive and it’s not good for you. Too much of it dramatically increases the risk of boards missing what’s important and not being able to fulfil their statutory duties, as NEDs will be too busy navigating through the fog of miscellaneous MI charts and Excel spreadsheets to be able to focus on what matters and spend time in the boardroom to best effect.
Cutting down on your sugar consumption might be challenging, but demanding the right information in the boardroom doesn’t require the same willpower. As a NED, you need the right information, in the right quantity and quality, in order to see what matters. And it’s your duty to demand this from your management teams. Don’t be tempted by the ‘one more won’t hurt’ mantra when it comes to board reports. Like biscuits, it’s usually not a good idea. Instead, consider your board’s priorities and the specific information you, as a NED, need in order to fulfil these. Demand that instead. Your board effectiveness will thank you for it.
As specialists in board information, we have reviewed hundreds of board packs over the years, working with organisations of all shapes, sizes and sectors. We understand the challenges that organisations face in equipping their boards with high quality information, and so we have developed products and resources to help them with this.