Board packs continue to get longer and more expensive to create. That is the headline finding from an analysis of the data gathered from over 1,500 users of our Board Reporting Calculator.
The calculator is one of a series of tools that were developed by Board Intelligence and ICSA: The Governance Institute, following our joint research published in December 2017. That research was the first to quantify the time and money organizations were spending on preparing and distributing board packs.
The evidence from the calculator is that costs are rising, and the average length of the board pack is growing at an alarming rate. Our analysis banded organizations by turnover size and, for each band, the average board pack is at least 50 pages longer than it was a year before. The board packs of companies with a turnover of more than $600 million are now more than 300 pages long, and even those of the smallest organizations come in at a hefty 180 pages.
The analysis also shows that many resources go into preparing, distributing, and reading the board pack. The average cost to companies is $4 million a year, rising to an average of over $10 million for the largest organizations. In other sectors, the time required may be more concerning than the cost. Small charities devote an average of 525 days a year to the board pack, using up a significant share of their resources, while for larger public sector bodies, it costs them a staggering 4,000 days a year.
These are significant amounts of money and time. And is the investment paying off in terms of the board papers’ quality and the board’s effectiveness?
Judging by the data gathered from the "Assess Your Board Pack" online tool — developed by Board Intelligence and ICSA — the answer appears to be no. Nearly two-thirds of those organizations assessed their packs as being “weak” or “poor” overall.
The primary purpose of board papers is to enable boards to have focused conversations about priority issues. So it’s very concerning that 64% of users felt that their own board papers are not currently meeting that purpose. Meanwhile, over half felt that the key messages in their papers did not stand out clearly.
The “Assess Your Board Pack” tool asks users whether their organization follows various practices related to the board pack. Their answers suggest that boards might want to pay particular attention to certain parts of the board pack production process.
Less than half of the organizations surveyed provided any formal feedback on whether their agendas are hitting the mark. Doing so would be an easy win. And a third of respondents don’t receive a brief on what the board wants covered in their paper. This is one of the biggest complaints we hear from management and is often the root cause of time-consuming rewrites at a late hour.
The management teams and boards we speak to are keen to prepare high-quality papers that support the directors in the discharge of their duties. Yet nearly 60% of organizations provide no formal training on how to write effective board papers. What’s more, nearly 30% do not use templates that could ensure essential issues are covered.
More information on the findings can be found in the latest edition of ICSA’s Governance & Compliance magazine. You can also find all the "Effective Board Reporting" resources on the ICSA website.
