Board papers are the main way of briefing directors on important issues and providing them with information they need to make decisions. They must clearly present all key information and facts and indicate the action required of the director. Board papers which don’t include all the necessary information in a form which is easy to read and understand can result in poor decision making.
Keep the length of papers to a reasonable minimum so they can be easily read and assimilated. 3 pages of text is about right
Keep the style clear and consistent - use house style (corporate branding, type and size of font, preferred layout), include lists and bullet points, write in plain English, explain unfamiliar terms or technical language and decode any acronyms
Start with a short executive summary so the directors can grasp the key issues before studying them in greater detail
Say whether the directors will be required to make a decision at the meeting or whether the paper is just for noting
Exclude unnecessary detail. The level of detail required should be determined by the information the director needs to make an informed decision
Include technical information or statistics in an appendix, with key points drawn out in the paper
Include relevant key metrics and information. The board should discuss and agree what it needs to see for, eg, major capital investments or divestments, acquisitions and disposals, entering into or withdrawing from particular markets, introducing or withdrawing products or services, entering into a joint venture or partnership etc.
Eg for an acquisition, the board may want to know key financials (such as cost of capital, forecast ROCE, forecast effect on earnings over a specified number of years etc), likely market perception, competitor reaction and effect on share price, implications for employees and for corporate reputation etc.
Include information about how the proposal impacts each of the 6 ‘success factors’ under s172 of the Companies (except any that are not relevant)
Include analysis of the risks of the proposal, principally to financials, market position and corporate reputation, but also to environmental, employees etc.
Consider the risks of not taking the action recommended in the paper
Give details of any internal sign-offs, approvals, discussions, external advice, views of key stakeholders which have informed the drafting of the paper and the recommendation
Give a clear and reasoned recommendation
Detail any further approvals required and likely timing- eg shareholder approval, approval of a regulator, approval of a parent company, joint venture partner or other related organisation