Getting the right information to the board

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Good information for trustees and board members is essential to your board's oversight of the organisation. It can however be a source of tension. Board members sometimes feel that papers do not give enough information, are insufficiently clear or too long. Staff may complain about the amount of information demanded by boards and the time taken to produce it. The important thing is to agree and be clear about how much information you need.

Governance expert John Carver identifies two types of information the board needs to effectively direct the organization

Information for making decisions

Issues brought to the board for decision should be supported by sufficient information for trustees or board members to make informed decisions. If you have staff it is common for them to prepare the papers for decision with such supporting information as they think appropriate.

It helps if your board is explicit about what it expects in papers prepared by the staff and gives feedback. Carver advocates that the board actively seeks the input of as wide a range of sources as possible particularly those who the organisation is set up to serve. This is explored further in accountability to stakeholders.

Information for monitoring

Monitoring information allows the board to see how the organisation is doing against agreed success measures. It should be in a form that is easy for board members to compare planned performance with actual performance. Financial monitoring reports to barods of trustees are common but far fewer organisations regularly report on other success measures. Even in finance there is room for improvement.

Relatively few organisations it seems, make use of simple ratios to understand their performance for example  the ratio of fundraising costs to fundraising income; or the ratio of trading costs to trading income. The use of such ratios can help board members compare different areas and more quickly see patterns for example the cost effectiveness of different types of fundraising. Such ratios need to be used with care of course, since behind the simple ratio may lie complex reasons for differences.

It may be difficult to compare your ratios with other charities because of differences in how information is prepared, but in some cases it is possible. For example fund ratios is the charity fundraising benchmarking project that enables charities to share and compare their data whilst preserving their anonymity.

There are a wide range of ways in which non-financial performance can be measured and a growing number of initiatives about how they can be done. See for example NEF’s prove and  improve website. 

Contextual information

John Carver describes any information other than for decision or for monitoring as merely 'incidental'. He warns against the danger of filling board agendas with interesting but largely superfluous information.

The counter view is that some contextual information allows the board to have a feel for the work of the organisation and a greater appreciation of what particular staff and teams do. Indeed information is not all about documents. Board members can also gain insight by attending their organsiation’s events or training  or by seeing staff at work or visiting services or centres run by the charity.

Think about whether your board is getting the information it needs with the following questions:

• Do we receive regular information that helps us understand whether we are achieving our mission?
• How useful are financial reports, do they  help the board to focus on key issues?
• What discussion have we had with the chief executive (if you have one) about what the CEO's report should cover?
• How do we encourage the staff team to share bad news as well as good?
• Are we receiving information we do not use or need?

In his book Boards that Work, David Fishel nicely describes the paradox boards face:

 ‘They need to get a close-up understanding of the operation in order to be able to stand back and play a productive role at a higher level. Without some organisation and sector knowledge, the board's decisions will lack context and could be misguided.’

Have your say

What have you learnt from the governance challenges you have faced in the past? Could you share your experience with others who are just starting out?

Ask questions and exchange ideas on the Governance forum.