A Director’s Perspective on Reporting to the Board
I want to thank David Finch, a board member who has also been the head of internal audit for a UK company, for his comments on a recent blog post of mine about audit reports.
He wrote:
As a NED, I have challenged CAE’s and executive management on the length of papers and reports issued to Audit Committees and Risk Committees.
Some provide the volume to demonstrate the work they have undertaken. Frankly I’m not interested in how hard they have worked – I’m interested in the control risks and governance implications within the topic under review.
Some believe they need to provide every last morsel of data, but forget that I need incisive information.
Some use volume as a way of passing the buck – “if you look at page 356 , paragraph 3, line 4, words 6-9”. One Finance Director got very upset when I said that I lost the will to live by page 350.
So why is it that executive directors (often with NED experience) don’t think likewise? Well Winston Churchill summed it up when he apologised for a long speech – he didn’t have enough time to make it short. And that could have been because he started in the wrong place to begin with.
As another board member wrote, reports (whether by management, the CRO, or the CAE) should be written with the customer in mind.
Write what the customer on the board wants to read.
There’s a great concept in Lean that you should only do work that has value to your customer.
That should go double when it comes to reporting.
It’s not only the writer’s time that is wasted by excessive detail, but the reader’s as well.
In fact, how many people will eagerly pick up a 20-page report? No. They may (if you are lucky) set it aside for a time when they have nothing better to do. Time on a plane is a favorite.
Make it easy for your customer to read, understand, and then act on the information you are sharing.
Provide them with the information they need to fuel the decisions they have to make.
Tell them what they need to know, when they need to know, and don’t bury valuable insights in a mountain of waste!
How do you know what they want to know? Ask them!
Every extra word is a barrier to communication and action.
Every extra minute on a report is a minute that could be spent doing something useful.
I welcome your thoughts.
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Norman Marks on Governance, Risk Management, and Internal Audit 
Absolutely agree. Very informative and instructive. “Tell them what they want to know. How do I know what they want? Ask them”. For me that is the take away. Thank you.
Appreciated that you took your own advice when writing the article 😉 Clever.
As someone that translates cyber for Directors I learnt early on the message is not communicated until it is understood – regardless of who was in my audience.
Interesting that you would point out volume! I agree with you but here’s my 2-cents after 35 years sitting on various boards:
1. Planning should start with the Board but you need a visionary at the table, solid scanning skills and enough communications to sell the idea (hopefully deeply routed in the firm’s most notorious assets);
2. Assessing the frontier between ideal and sufficient delivery so your CEO knows how far to stretch and why now, including referring to your Board’s risk tolerance level;
3. Identifying pain points and agreeing on resource allocation to address 20% or less of them over a period;
4. The elements above are your basis for monitoring and reporting. Let me know if this makes a difference for you?
These are interesting points, but there’s too much emphasis on selling rather than discussion for me. Board members have insights too.
Hi Norman,
Interesting discussion.
The question that I often raise is that: What if NEDs do not know what risk information needs to be reported to them or they do not even know the scope of the information that is there for Executives to report on. I sometimes get a response that the risk management professionals ought to know what information to report to the Board. What’s your take?
Do we perhaps need more industry standards or guidelines on getting the Board reporting right?
Yes. They are so confused by the consultants and so on who talk about risk that they forget it’s all about success. If instead they ask what can help or hurt the business in achieving objectives, they will get useful information.