Bosses baffled by mountains of boardroom bumf

Company directors are being deluged with hundreds of pages of verbiage ahead of monthly board meetings, hindering their ability to make good decisions.

The documents bosses receive – known as ‘board packs’ – weigh in at nearly 300 pages for larger companies, according to consultancy Board Intelligence. This is up from 267 pages in 2023. Directors would need to read solidly for two working days every month just to get through the material.

Not surprisingly, six out of ten directors said finding the key messages in board packs was ‘like looking for a needle in a haystack’.

Two-thirds said it was not just the quantity of information that was a problem, but its quality, rating the papers as ‘weak’ or ‘poor’.

Only one per cent rated the information in the packs as ‘excellent’.

Monthly board meetings are important to the success or failure of a company because they are where key decisions are made.

Struggling to keep afloat: Six out of ten directors said finding the key messages in board packs was ‘like looking for a needle in a haystack’

The board pack is meant to inform directors – including independent non-executives who do not work for the firm – on the state of the business and any issues needing addressing. If the pack is poor, directors do not have a clear picture of the company and are therefore not in a position to recognise problems, challenge poor strategy and make good decisions.

The sheer weight of bumf means boards ‘are not being set up to succeed’, according Pippa Begg, head of Board Intelligence, whose clients include Nationwide Building Society, software group Sage and water firm Severn Trent.

‘Boards are not having the conversations they should be having,’ she says.

‘They’re not talking enough about innovation and growth.’

She asks: ‘If the big picture thinking isn’t taking place in the boardroom, where it’s supposed to, where exactly is it happening?’ More than half of directors said they received their packs less than five working days before meetings, leaving barely enough time to absorb them. A fifth rarely or never received board papers on time. Begg says this placed ‘unrealistic’ expectations on them, as independent non-executive directors are only paid to work between 1.5 and 3.5 days a month.

The report found that companies use information overload to bury bad news. More than four out of ten directors said management was not upfront enough about negative developments in their briefing notes.

Information inflation is not confined to board papers, but corporate reporting more generally.

The biggest culprits are financial services firms, which Begg describes as ‘terrible’.

The annual reports that banks send to shareholders have grown thicker. Barclays’ report now runs to 535 pages – almost double what it was a decade ago.

Part of the reason is that companies now report on a wider range of issues including gender diversity, pay gaps and green issues.

Begg said companies should learn from fast-growing technology companies such as Amazon and Nvidia, where PowerPoint presentations are banned and communications are much more streamlined.

Board Intelligence analysed more than 1,000 organisations’ board pack self-assessments.

A further 300 interviews with directors were also conducted.

Mark Northway, director at private investor lobby group ShareSoc said: ‘It is too easy for companies to rely on simple data dumps to their boards.’ He called on independent directors to challenge executives when the information is ‘impenetrable’.

He added: ‘Too many companies treat the board meeting as a marketing exercise, regurgitating optimistic flannel to directors.’

‘Staff use data dumps to bury bad news’