Align Board Reporting with Strategic Planning | RKL LLP
Posted on: August 8th, 2017

Why Board Reporting Must Align with Strategic Planning

Why Board Reporting Must Align with Strategic PlanningAn engaged, effective board is critical to the successful execution of an organization’s mission and achievement of its vision. Far too often, however, the information and data the board rely upon to make significant decisions and set policy for the organization are presented without the context of the overarching strategic plan. Below, we’ll take a look at how connecting your organization’s reporting to the strategic plan helps the board manage accountability and measure progress toward its goals.

Board and management responsibilities

Before discussing improved board reporting, here’s a quick overview of the basic responsibilities of an organization’s board and management team. A good board is focused on setting policy, making key decisions and directing management to move the organization forward. A good board chair facilitates that focus by setting a clear agenda and keeping the members on track. Overall, the board is responsible for:

  • Approving and adopting the organization’s strategic plan;
  • Reviewing performance results compared to the organization’s mission, strategic goals and peer organizations;
  • Establishing performance metrics and goals for key management functions and roles; and
  • Developing a consistent schedule of review and carry out accordingly.

An organization’s management team is responsible for:

  • Maintaining a good relationship with the board;
  • Providing the board with regular performance reports and updates;
  • Executing board-approved policies to achieve strategic goals and objectives; and
  • Developing, applying and monitoring written performance standards for all organization functions.

Connect to strategic plan and measure performance

The common thread running throughout the roles and responsibilities outlined above is strategy. Without a clearly defined strategic foundation, the board cannot live its values and carry out the organization’s mission.

Once the strategic plan has been adopted, the board should identify the performance metrics that will be used to gauge progress and how regularly these metrics must be measured and reported. Ideally, performance metrics include results from the current period and a “trend period,” generally a previous five-year period, to provide helpful context and comparison.

Benchmarking data that compare the organization to its peers can also be a valuable assessment tool. Management should always include a narrative that explains negative trends, significant variances between time periods or differences between the organization and its industry or peer group. The frequency of performance metric reporting depends on the organization; however, a general best practice calls for the analysis to be completed quarterly at a minimum.

An organization’s performance metrics form the basis for evaluating and tracking progress toward strategic goal achievement. They also provide the board with information related to the organization’s goals. Goals that are not met should be assessed to determine if further action is warranted and goals that are consistently met should be evaluated to see if they should be increased or raised.

Other best practices for board reporting

An organization can also adopt the following to improve overall board reporting:

  • Adhere to established timeline for information availability and ensure that information is available well in advance of board meetings
  • Use technology and intranet (iPads, web portals, GoToMeeting) to expand access and participation
  • Develop a consistent, visual reporting format, like dashboards, charts or graphs

Interested in aligning board reporting with your strategic plan? RKL’s team of consultants can assist organizations, government agencies and other entities with this and many other financial management and operational improvement efforts. Contact one of our local offices today for more information.


Mark S. Zettlemoyer, CPA, CFEContributed by
 Mark S. Zettlemoyer, CPA, CFE, Partner in RKL’s Audit Services Group, and Gretchen G. Naso, CVA, MBA, Principal in RKL’s Business Consulting Services Group.

Mark has nearly three decades of public accounting experience serving local governments, not-for-profit organizations and a broad range of corporate clients.

Gretchen has significant experience is providing operational consulting services to both not-for-profit and commercial entities.

Gretchen G. Naso, CVA, MBA, Principal in RKL’s Business Consulting Services Group

 

 

 

 

 

 

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