A consistent theme in board evaluations we facilitate concerns board reports and papers. Management is generally keen to provide the board with the information it needs and in the right way. However, achieving clear and consistent guidance from the board on its requirements in this regard isn’t always easy. In part, this is because of the different personal styles of directors but other factors such as legal liability, performance issues and stakeholder expectations also come into play.
One particularly important report is the CEO’s report. In this article, we share some of the issues and insights on what we consider makes for a good CEO report based on engagement with hundreds of boards and management teams.
Common feedback
One of the most common criticisms we hear about the CEO’s report is that it is a collation of various departmental updates and lacks the strategic, cohesive narrative that the board is seeking.
As some directors comment, they are keen to know “what is keeping the CEO awake at night and what is the CEO most proud of” for the reporting period.
The solution
The starting point for re-shaping the CEO’s report starts with the board.
It is ultimately the board’s responsibility to define its expectations regarding the nature and format of board reports and papers, including the CEO’s report.
Ideally, a well-constructed CEO report should serve as the heart of the board pack. It should reflect the CEO’s strategic perspective and be written with clarity and purpose. Although others – including AI – might be used in creating the first draft, delegation of entire authorship can dilute the impact of the report.
An effective CEO report should, based on the following principles, seek to:
- reflect the CEO’s strategic thinking and insights
- highlight matters relevant to the board’s role
- provide the board with a stand-alone summary of the company’s performance for the reporting period
- synthesise key performance outcomes, risks, and opportunities, and
- maintain a candid, concise, and forward-looking tone.
A CEO report framework
So, what might the framework of a good CEO report look like based on these principles? Of course, the CEO’s report will be tailored for each organisation. Below are some suggested headings.
Using a predictable format once agreed between the board and CEO is also important as it helps directors navigate the report efficiently.
Begin with strategic context | Provide a high-level overview of the company’s strategic environment and position, including major shifts, risks, or opportunities.
Outline matters where board support or decision is required in the meeting | Identify matters that require board decision-making or decision with linkages to other reports or papers in the pack. This ensures meetings are focused and productive.
Emphasise key performance metrics and trends | Present key operational and financial performance data clearly and concisely, using visuals where appropriate. Focus on insights rather than information, and highlight where the board’s input or support is required.
Discuss significant strategic issues | Highlight significant achievements and challenges in areas such as people and culture, risk and compliance. Some of these issues might be covered in more detail in other papers.
Report on significant projects | Summarise progress on major projects. These might be elaborated on in a separate project report or paper/s related to particular projects.
Highlight key stakeholder issues | Outline key issues arising from stakeholder engagement, complaints or compliments. Boards are rarely seeking a list of all engagement undertaken by the CEO.
How Directors Australia can assist organisations
Directors Australia works with the boards of publicly listed, government, private, APRA-regulated and for-purpose organisations to achieve ‘best fit’ corporate governance appropriate to the organisation’s nature, and thus enhance board and organisational performance.
Through our board and governance advisory services and our Governing for Performance® framework, we support organisations in strengthening:
- the quality and impact of board papers
- management understanding the role of the board, and
- board and management principles for operation and mutual expectations.
For further information or to discuss how we can help, contact us here.
**Nothing in this article should be construed in any way whatsoever as legal advice. It is the reader’s responsibility to obtain expert legal advice on any issue which requires a professional legal opinion.
Kerryn Newton
Chief Executive Officer
