Ever since the dramatic market events of 2008, the way companies are run and the way boards function has become a hot topic of debate amongst directors, commentators, regulators, investors and the general public. Scrutiny has, quite rightly, been placed on the competence and the diversity of the people appointed to PLC boards, but another critical determinant of an effective board has been largely overlooked: the information board members receive from the executive with which they do their job.
Boards exist to supervise and steward, but their effectiveness depends on the scope and quality of the information they receive. The monthly information pack provided to the board is one of the key communication channels between the executive and non-executive (NED), yet our research and experience has shown that the scope and quality of this information is often inadequate.
Board directors share the responsibility for board decisions and strategic direction. But with limited access to the right information, it is difficult for NEDs to fulfil their role. Highly skilled and experienced NEDs are not enough if the information they receive is of poor quality.
We believe that improving the quality of information available to corporate boards is one of the most powerful ways of improving board effectiveness. Well-informed directors are far better placed to add value and high quality board information can help overcome the inherent information asymmetry at the heart of corporate governance. We would like to see a demonstration of best practice in this area incorporated within Corporate Governance Codes.
We have outlined below the impact of information on the effectiveness of a board, why current board materials are often found wanting and what can be done to improve the quality of information reaching our boardrooms.
To read the full White Paper please click on the link below.
For further informatation or for a copy of the White Paper please contact:Emma.Sturdee@boardintelligence.co.uk