The true cost of board reporting revealed

Board Intelligence and ICSA: The Governance Institute recently published a calculator designed to uncover the hidden costs of board reporting. The calculator can be found here.

Taking an average FTSE 250 company, the cost of board reporting is said to be between £2.4m and £2.9m, with between 956 and 1,169 days taken each year to provide those board reports.

We’ve all experienced those meetings where we’ve questioned the value of the information being reported. Companies may have continued to allow unnecessary reports to be produced because the costs have been seen as negligible. The board reporting calculator changes this view considerably.
The calculator focuses on three areas: writing board and committee papers, compiling and distributing those papers and reading them. It doesn’t include the cost of the meetings themselves, but unnecessary reports also take up precious time in meetings that would otherwise have been spent on more meaningful items.

Important questions to ask are:

  • What information is required and by when?
  • Does the paper provide the reader with everything necessary to make a decision?
  • Is there a concise executive summary that enables the reader to understand the key areas of the paper?
  • If the paper is simply for information, does it really need to be produced or is there a better way of reporting that information?

What is clear is that the negative effect of unnecessary papers is compounded as you go through the board reporting process. Get it wrong at the outset and you’re paying for it at every stage.

If you would like a professional review of your board reporting process, please get in touch with our corporate governance experts.

dmurray@jordanscorporatelaw.com
0117 918 1232

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