The Importance of Committee Reporting

The Importance of Committee Reporting

Transparent Insight Into the?‘Workhorses of the Board’

(Originally appeared in the March 16th, 2022?'Across the Board'?digital publication, a Board Director, Board Advisor, C-Level, and Business Leader publication reaching 27,500+ exceptional business leaders in over 70 countries with articles focused on leadership, strategy, and governance topics - sign up?here)

It is no secret that proper governance is the cornerstone of great Boards. It can be attributed directly to the organization’s success as well as the inherent lowering of risk at all levels within the organization. Additionally, the direct and effective linkage of governance to the goals and strategy of the organization can elevate this collective success even further. Overall, and unsurprisingly,?the effectiveness of your Board has a direct correlation to the understanding and application of strategy and governance. This being said, governance structures can widely vary across Boards depending on industry, industry vertical, size of Board, experience of the Directors, business complexity, and the level of risk a Board is willing to allow their organizations to live with.

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With business complexity continuously increasing and an ever-changing economic and political climate accelerating, these challenges place elevated demands on organizations that must be quickly and systematically addressed to stay relevant. Effective governance (alongside linked strategy) should therefore be a lived framework and process that aligns leadership to take effective action with accountability in the areas of policies, systems, and structures.

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One of the easiest ways to kick-off great governance within a Board is to implement a systematic approach for transparency through structured and consistent Committee Reporting. Board Committees, rightfully known as the?‘workhorses of the Board,’?can easily act as the foundational governance starting point in this process, and also keep important consistency.

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The success of any governance model is always dependent on the proper linkage of the organization’s goals, strategy, & governance, and Board Committees need to follow this prerequisite, as well. Board Committees commonly align their efforts to their specific sub-goals and associated strategies, but should never lose sight of the overall goals and strategies that these roll up to. This alignment is paramount to ensure that Committees are focused in areas that bring value to the agreed overarching goals of the Board and organization, hence the benefit of Committee reporting not only providing insight on the Committee’s focus and accomplishments, but also allowing for multiple lenses (individual Board Members and other Committees) to evaluate the relevance.

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Structured Committee reporting is a best practice unfortunately still not followed by a fairly large number of Boards.

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This can prove to be a mistake with multiple instances of these Boards simply not accomplishing what they set out to do while simultaneously hindering proper cross-Board communication. Conversely, Boards that implement Committee reporting requirements commonly experience higher levels of success, decreased risk, full Director involvement, and more robust decision outcomes.?

When structuring a reporting requirement, recognize the key components of a great Board Committee Report:

  • Key Message
  • Previous Board Committee meeting date
  • Upcoming Board Committee meeting date
  • Overall Committee RAG (red / amber / green) Status
  • Committee Scope / Timeframe / Budget / Risk & Issue / Resource RAG Status
  • Accomplishments (milestones) since previous reporting cycle
  • Planned accomplishments (milestones) in upcoming reporting cycle
  • Short descriptions of accomplished work and/or challenges in reporting cycle
  • Risks & Issues correlated to reporting cycle

Examples of Board Committee Report layouts can be helpful in understanding important content areas:

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Note that some Committee reports also reiterate the Committee’s Goals and which overarching organization goals these roll up to – I believe this to be a great practice, allowing for a familiar guide to keep the Committee on track and also acting as a reminder of why the Committee’s work is so important.

Committee Reporting Frequency:

  • During normal operations, many Boards adopt a quarterly Committee reporting schedule, or directly align the reporting count/frequency to the scheduled Board meetings.
  • During transitional times, many Boards adopt a monthly Committee reporting schedule

It must be remembered that Board Committees comprise a large and important component of the governance process. This should be created with clearly established reporting procedures along with a documented scope of authority, commonly achieved through a Board Committee Charter. Instill a deep level of governance and strategic responsibility within your Board’s Committees to harness the governance advantages from the?‘workhorses of the Board.’

Are your Board’s Committees properly enabled for governance excellence?

Reach out to learn more?through?our?Board Director Education & Certification program, plus?Consulting &?Advisory?offerings,?and?International Speaking Tour?topics.

Mark A. Pfister - Non-Executive Director |?CEO |?Chief?Board Consultant?| Corporate?Strategist | Board Macro-Influencer?| Speaker?| Author - www.PfisterStrategy.com

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About the Author:?With a strong focus in Strategy, Governance, and Technology/Cybersecurity, Mark A. Pfister is CEO & Chief Board Consultant of M. A. Pfister Strategy Group, an executive advisory firm that serves as a strategic advisory council for executives and Boards in the public, private, and nonprofit sectors. He is also Chairman & CEO of Integral Board Group, a specialized Board services and consulting company.?Mr. Pfister is a?'Board Macro-Influencer'?and his success has been repeated across a wide range of business situations and environments. He prides himself on being a coach and mentor to senior executives and directors. In Board Director circles, Mr. Pfister has earned the nickname?'The Board Architect’.............?<< read full bio?here?>>

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Here's Some Additional Reading

Governing the Escalation Process

The In-Between Director

Are You Hindering Your Appointment?

Can The Board Truly?Govern?A.I.?

The Great CEO Swap Out

An Important Lesson In Board Director Risk

See all articles?here

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