Four Essential Board Presentation Tips for Management

This feature is a guest post from Julie Garland McLellan. We know Boards report that many of their meetings with management are not providing them with the breadth of information they need to make informed decisions, due to a lack of understanding around how to present to Boards. We hope our clients find Garland McLellan’s insights on this topic to be useful.

C-Suite Executives can spend up to 30% of their time working on Board related issues.

These include preparing reports for the Board and its committees, preparing for and attending Board or committee meetings, writing minutes, assisting with induction programs, or providing one-on-one advice to help directors reach the level of expertise to allow responsible decision making. Taking into account management time and Director expenses for these meetings, management engagement with Boards is an expensive proposition.

Unfortunately, although Boards receive ample advice on how best to oversee management, and management knows well how to take the reins of the company, they receive little direction on how best to convey proposals and company issues to the Board. Yet the repercussions of Board presentations going awry can be disastrous. In extreme cases, careers can be curtailed and Boards can make decisions that are not in their, or their shareholders’, best interests. Presentation and negotiation skills training often exacerbate this problem by giving executives the skills to couch proposals in persuasive terms and avoid a frank discussion of the potential risks.

Ideally, managers need specific education on how to prepare material for Boards and present it at Board or committee meetings. Yet until they have the time to take part in such training, even a few tips will help their preparations for Board engagement:

  1. Address the risks

Management, or anyone else presenting a proposal to Boards, must understand and identify an appropriate risk management framework, and provide appropriate guidance in their proposals. 

Although company Directors are responsible for corporate performance and the oversight of  compliance and risk management, they struggle to identify the key risks in the projects they approve; they are not full time employees and do not have the time to thoroughly investigate every proposal. They thus have to assure themselves that management has effective identification, control and mitigation strategies in place to manage risks.

Integrating a risk management framework into a proposal helps Boards to move away from an excessively conservative position and consider the value of the project.

It is important for the manager presenting a proposed project to put forward clear strategies for managing and mitigation of all risks, even if they’re corporate risks and not likely to fall within the purview of the project alone: the risks usually discussed by management are those that are intrinsically linked to the proposal, but these are not the risks of most concern to directors, and are only a small part of the risk paradigm.

Without identifying and discussing the real risks – the elephants in the room – there will be no plan in place to allay Board concerns about constraints to the organisation’s success.

  1. Adjust your presentation to fit your Board

Exactly which risk elements to highlight in the presentation will depend on whether the company is a commercial, government or not-for-profit organisation, and the age and experience of its directors, as these differences will affect which risks the Directors focus on.

Adjusting the presentation to focus on the likely preconceptions of the directors allows the presenter to prepare answers for issues that may be raised, and to proactively guide the conversation toward a successful conclusion.

As a guideline, much of the risk paradigm for a Board Director is described by the following five major elements:

  • Financial – Cashflow and the need to have sufficient money when needed, with less emphasis on fraud or financial statement inaccuracy.
  • Government – Potential changes in the legislative or regulatory environment that would prevent success.  Boards need a system of monitoring likely policy developments, and an agenda for briefing politicians and their advisors on implications of change.
  • Resources – Boards, having addressed the financial resources, predominantly consider human resources. Inadequate or misapplied resources to a project can undermine the potential for achievement of objectives.  Also frequently mentioned is the loss of IP with departing staff.
  • Strategy – Directors need to be convinced that a project is aligned with the existing strategy and that the organisation has skills in place to implement a given project.  Effective communication of the strategy throughout the company is seen by the Board as essential to success.
  • Leadership – New initiatives need management support.  Also, Boards themselves express the importance of leadership, characterised by the need to reach consensus, and be willing to take bold initiatives if required by the strategy.
  1. Inquire, don’t present

Many executives err on the side of caution and strive to only showcase projects to the Board when the risks have been thoroughly analysed and strategies put in place to manage them. Board time is precious and executives are loathe to ‘squander’ it by entering the Board room without having thoroughly prepared their arguments and developed authoritative answers to any potential queries.

Hence, given a single chance of access to the Board, most professionals opt to present rather than to inquire.  However, it is the process of inquiry that opens up the possibility of discovering (and developing plans to manage) new risks, especially if there’s a difference in perception between the Board and the management team.  The courageous step of relinquishing control and allowing the process of inquiry is the only way to gain insight into the Board’s perceived risks.

If there is only one chance to gain Board time, then that chance should be spent on developing a shared understanding of the risks rather than presenting on the project manager’s understanding of the risks.

To maximise the chances of success, Board input should be sought at an early stage to allow the Directors to own the key risks that will form the basis of monitoring and reporting the project at the Board level. This should involve a meeting between management and the Board to discuss the issue before management has finalised its proposal.

Ideally the Board input will be first gathered in a forum where the Board members feel able to be candid about the issues that cause them greatest concern.  This is not always in the presence of management, except perhaps the CEO.  Expert advice can be sought and then a Board-only or in-camera session used to allow directors to candidly discuss their reactions to the proposal and also their confidence in having the skill to govern it.

To get the most from the Board input, the forum must be an information gathering exercise and also an arena for the development of a shared vocabulary for discussion of the largest risks that threaten strategic attainment and the successful delivery of the project.

Once the process has been started through an open inquiry, the Board can be kept informed via written reports and graphic KPIs. 

  1. Once is rarely enough, but be brief

While there is less need for a repeat meeting if the Board has reached consensus on the key risks, most Boards will find the time for a follow up session with the project proponent. Boards are more likely to invite back a presenter who has engaged them and provided them with an opportunity to contribute.

Usually the second ‘presentation’ is brief and often the executive will not be required to formally present at this stage. A sound Board paper, written for a Board that is already well informed on the issues and familiar with the context, is usually sufficient to enable the directors to form a consensus view and take a decision. This reduces the burden on both Board and management and allows for faster Board meetings and better corporate outcomes in the long run.

Boards are more likely to invite back a presenter who has engaged them and provided them with an opportunity to contribute. Being seen by the Board as a person who understands the relevant risk factors for the organisation in the overall corporate context, and who can thereby add strategic value will enhance the reputation and maximise the chances of success of even the most technically skilled professional project proponent.

Payoff

A management team that engages the directors at the point where they can shape nascent strategies allows the Board to gain familiarity with concepts before they are called upon to give a sign off or resolution. It also allows directors to use their judgement (which is often what they were recruited to provide) rather than their editing and proof reading skills (which might be scant).

By increasing the productive discussion time the Board can reduce the written briefings and the need for time-consuming written requests for clarification or additional information. This, in turn, reduces the volume of written material and heightens the focus upon the papers that are provided. It also tends to lead to a better crafted agenda with an appropriate balance of the performance and conformance roles and provides a more satisfying Boardroom environment. In short, it helps busy directors to give the best value they can to the companies that they govern.

Julie Garland McLellan is an experienced Board director, a former senior executive and the author of ‘Presenting to Boards’.  Julie provides specialised training on Board interactions for senior executives and also facilitates Board strategy workshops. She is a trusted adviser to established and future Board Directors, presents regularly on corporate governance for the AICD and other governance professionals, and consults with Boards on corporate governance issues.  Julie is the author of ‘The Director’s Dilemma’, a monthly e-newsletter that is distributed to 21 countries worldwide. Full details are available at www.mclellan.com.au.

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