There is an art to running a good board meeting or directors’ meeting. Quite a few elements must come together to make it a productive time and achieving the goal of good governance. It’s no secret that quality financial data makes for better decision-making during a Board Meeting.
The Office of the Registrar of Indigenous Corporations (ORIC) recently wrote out some tips on Planning and Holding Directors’ Meetings. Of course, no board meeting should go without a good money story. It’s the essence of good decision-making. Here we add our suggestions on where to start.
Preparing for the Board Meeting
Good planning and co-ordination of the meeting are essential to making this a smooth and time-efficient process for board members and directors involved.
There are some key areas to focus on where you get most ‘bang for your buck’:
- Good communication is one of them.
- Notifying directors in advance goes a long way to keeping members both informed and involved. Yes, there is a bare minimum time you are legally obliged to provide for some meetings but would more time help the discussion? If members have time to review and think about the financial reports in good time, they will make a better contribution at the meeting.
- Naturally, the agenda should be circulated prior to the meeting to help everyone prepare for the upcoming event. The ORIC article mentioned earlier has a great list of what should make it onto the agenda.
Great Leaders make Great Chairs for a Board Meeting
A great chair is paramount to a fluid meeting that stays on schedule and follows the agenda.
The chairperson needs to have a good understanding of constitutional matters. This helps to reduce conflict on challenging discussion items, keeping the organisation within its legal and ethical bounds.
Inclusion and Democracy
Where a great leader is appreciated most, is in managing the people on the board. Sharing the floor so all directors and members can put forward their views and opinions, keeps the process democratic and makes everyone feel included.
Not everyone on a board is there because of their business or financial acumen and experience so it’s important to present information in a way that is easily understood. Using charts and summarising data can help non-accountants get to grips with the finances without feeling overwhelmed by the details.
Open the Door to Advisors
The ORIC article mentioned earlier, showed some great leadership from the Yagbani Aboriginal Corporation directors by inviting their new financial consultant to join their meeting on Goulburn Island. They felt it important to meet and help develop a mutual understanding and set expectations. Working remotely, this introduction to the organisation, staff and local residents gives the financial consultant a valuable perspective too helping better understand the essence of how things work on the island.
The Money Story
To move an organisation forward, decisions must be made at the board table. This is important to reach short- and long-term strategic goals. Good information and data are the crux of good decision-making. Board reports should provide members with a view of what has happened and where the funds are going to be in the future.
What Reports to Include for the Board Meeting
Here are some suggestions of what financials should be tabled at the Board Meeting:
- Profit and Loss Statement
- Balance Sheet (ideally with a comparison to the same time last year or the beginning of the year)
- Cashflow Forecast (min. 3 months but 12-months is better)
- Budget vs Actuals comparison
Overview of various programs in progress
How Numbers Turn in to Visual Stories
As board members come from various walks of life, not everyone is a financial genius. The tip here is:
- Keep the reports at a summary level to provide an overview.
- Deliver some graphical reports to help the non-accountants at the table grasp the essence of the story.
Graphs and Charts
Graphs and charts are another really easy way to turning numbers into picture stories.
This chart here focuses on income only
- The various income streams are stacked in different colours.
- Not only do directors reading this report see there is an upward trend, they can easily make out where the income is coming from. This helps identify which parts of the business are worth doing. It channels the decisions around where to allocate resources.
There is some great help available to organise and run great a board meeting. For aboriginal corporations, the CATSI Fact Sheets are a great starting point. Our Community and the Institute of Community Directors of Australia (ICDA) offer some great resources from help sheets to tools and articles. And, if you’re ready to review your board meeting reports, have a read of Three Things to Include in Your Board Reports.