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Is It Time to Rethink the Chief Executive’s Report to the Board?
Many chief executives complain about their boards. They use terms like ‘meddling’ and ‘crossing the line’. They also lament that their boards spend too much time in the detail and are not strategic enough. While boards are susceptible to these behaviours, a quick look in the mirror is likely to help these chief executives find the principal source of their problem. The answer will frequently lie in taking a fresh look at how they are reporting to the board. In particular, they should focus on the type of report that they make personally to the board. The potential to engage in a powerful dialogue with the board is seldom realised.
Common shortcomings in chief executive reports
Traditions have developed in many organisations around chief executive reports and a pattern has been set that often falls short of the ideal. The following types of reporting are seldom questioned but are examples of how a great opportunity for the chief executive to engage with the board in a more effective manner is lost.
A better approach
So what is the nature and content of the Chief Executive’s Report that would make it a more useful document?
Firstly, it should be a high level and relatively brief document (1-2 pages). If a longer report is needed it is probable that some of the content deserves a separate report. Think of it as the principal opportunity a chief executive has to summarise the ‘state of the nation’ and to tell the board, succinctly, what is on her mind. Always respecting that it is the board’s meeting not the chief executive’s it should address the types of matters that the chief executive wants the board to be aware of and to be thinking about. In this sense it should be a ‘scene setter’ for the board meeting, highlighting, for example, important decisions required from the board.
The report should encourage and contribute to an ongoing dialogue between the board and chief executive about what is really important in relation to the ‘thrival’ and survival of the business. It might allude to current performance issues but the substance of these should be contained in specific, performance-related reports elsewhere in the board meeting pack. Because the Chief Executive’s Report should be forward looking it is likely to be more focused on emerging solutions than an analysis of problems.
The report’s content should also be a reflection of the chief executive’s commitment to the ‘no surprises’ principle. It should, therefore, be a ‘heads-up’ from the chief executive giving advance notice about emerging opportunities or concerns. It should embody and advance the type of open and progressive interrelationship that characterises effective board/chief executive partnerships. In that sense it is also an opportunity for the chief executive to flag and seek advice and input from the board on matters that she still has under consideration. Used in this way, both board and chief executive can be more confident that when, for example, a proposal finally becomes concrete and arrives on the board agenda, it will be more ‘approvable’.
A test of a good chief executive’s report is that, if all other reports for the meeting were ‘lost in the mail’, it would provide the framework for a dynamic and productive board meeting. That does not mean it is a summary of other reports contained in the board pack but it should, to a significant degree, enable those to be mostly taken as read.
There is one final test of the Chief Executive’s Report. The type of report advocated here is, by its very nature a highly personal view. That means it is capable of being produced only by the chief executive. If it could have been written by someone else on the executive team it is unlikely to be hitting the mark.
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BoardWorks International is a specialist governance effectiveness consultancy dedicated to assisting governing boards to provide effective strategic leadership to their enterprises and to fulfil their fiduciary and stewardship responsibilities to their stakeholders. It is also our aim to make 'board work' a satisfying and enjoyable experience for all who serve on or provide support to, governing boards.