Board documents are an essential source of information that informs the key decisions that keep a business on the right track. Too much information can overwhelm a board member and result in poor decision-making. Likewise, too little information means that the board is not getting crucial insights or is at risk of losing control over the business. To avoid this, board members should have access to thorough and accurate information that is easy to digest and well-organized. This article outlines the best practices for drafting effective board documents which meet these requirements.
Effective board documents contain the most current and pertinent information that is directly linked to the strategic decision at hand. They are concise, clear and use a formal business style. They stay clear of jargon and technical terms. Boards comprise diverse backgrounds, therefore the information should be tailored to each directors needs. Marketing jargon, as an example, is not relevant to finance professionals. If you are creating documents for boards, be sure to include a glossary with any specialized terms or acronyms. This will ensure that all readers are able to comprehend the document.
In addition, the board should establish its own internal guidelines and standards for preparing board documents. This includes the use of templates and preferred choices for fonts, as well as the creation of an appendix sharing sources or providing additional details. The board should also set the rules for a meeting’s quorum and the number of directors required for the meeting to hold. This will ensure that all directors are able to take part and be heard.
Boards should distribute their meeting materials ahead of time so that directors have ample time to go through them prior to the meeting. A week is a good period to allow directors ample time to study and prepare for the meeting.
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