Graphic: Arrow Join Now! Graphic: Arrow MY AFP Profile Graphic: Arrow AFP Canada Graphic: Arrow AFP Mexico Graphic: Star MAKE A GIFT







Print PRINT Share SHARE Comment COMMENT

KISS Your Board: How to Inform your Board in Five Minutes or Less!

Resource Center - Foundation

By Erin Roberts 

Erin RobertsYou may have heard me say that high performance organizations have boards that make good decisions. Typically, management provides information to assist with the decision-making process.

Unfortunately, many boards receive too much information that’s poorly organized, derailing timely and effective governance practices.  Complicated financial statements and complex management reporting are key symptoms of dysfunctional decision making. 

Using the K.I.S.S. (“Keep It Simple, Silly”) principle will help you better equip your board to make timely and informed decisions. 

As a general rule of thumb directors need three things: 

  1. The right information
  2. The right comparatives and metrics
  3. The right format

The first two of these elements should be presented as a consistent set of back-up reports with metrics that directors can refer to for more information. Performance metrics are a valuable and simple way of tracking organizational health. A brief dashboard that shows three years of comparable metrics with actuals against targets is an excellent, at-a-glance tool.

The last element, the right format, is the five-minute report that notes only those items that require direction, decision or action by the board or one of its committees.

The information presented should cover four key areas:

  1. Sustainability
  2. Strategic objectives
  3. Member value
  4. Financial status

Let’s use an example. The board needs to know the organization’s financial status, and usually they are provided with a set of financial statements and little, if anything, else.  As a management tool, financial statements reflect a specific point of time and its relevance changes over time.  Often, financials include too much or too little detail. Many smart people are overwhelmed when presented with pages of numbers and are reluctant to admit they do not understand how to dig through the data to find the relevant information.

Instead, present well-structured financial management reports. Everything an organization does is reflected in the numbers.  Well-designed financial management reports should quickly and simply communicate the big picture. In addition to reflecting on the organization’s management ,the reports should answer (a) Are we moving towards our objectives?; and (b) Are there risks or opportunities we need to address?

Keep it simple: present data in a format that is easy to review, analyze and understand.  Too many details complicate and mask key issues.  Use a table that includes high level, key functional line items:

ABC Association

Financial Results as of month, date, year

YTD

(This year)

Actual

 

201X

(This year)

Budget

 

Variance

% or $ Over/(under) Budget 

   

Actual 201Y

(last year)

Same date 

 

Variance

% or $ Over/(under) last year

 

Actual

201Y

(last year)

Full Year

Also highlight year-over-year trends and progress against targets in key expense and revenue areas.

In addition, a good management report should support the statements by drawing attention to items of note, adding details to explain variances and specify where the board needs to make decisions. It is NOT a list of activities highlighting how your time was spent. 

As an example, financial reports might show that a program is under budget. Does this mean we’re doing a good job by containing expenses, or does it mean we’re not delivering the planned programming? You may need to flag the variance, as it may mean that the organization is not providing good member value and the board may be required to provide direction to rectify the situation.

By keeping it simple, well-structured management reports facilitate a board that is informed, high functioning and engaged in proper risk management and member value. In addition it can intelligently seek opportunities, monitor key milestones and move the strategic plan forward—all for the betterment of the organization and its members.  So pucker up and K.I.S.S. your board!

Erin Roberts is a partner at Zzeem. A management consultant and expert in business process re-engineering, Erin enjoys working alongside nonprofit executives as they lead their organizations to new levels of success. For more information on this subject download a copy of Zzeem’s “5 Minutes or Less” workbook. For more information on association topics, check out our live interviews with association leaders on Zzeem’s VIMEO channel http://vimeo.com/zzeeminc including Part 1 and Part 2 of webinars on this topic and of course, our blog http://blog.zzeem.com/.



4300 Wilson Blvd, Suite 300, Arlington, VA 22203 • 703-684-0410 | 800-666-3863 | Fax: 703-684-0540
©2009 AFP. This site content may not be copied, reproduced or redistributed without prior written
permission from the Association of Fundraising Professionals or its affiliates.
Privacy Policy | Feedback | Contact Us | Advertise with Us