Board reporting in 2024 made easy (avoid these 5 mistakes)

How to prepare board reports

Let's get strategic. How do you prepare to report to the board?

What does the Board of Directors want to see? Who are the committee members? How do you present your financials in a clear and concise format?

When you present financials during board meetings, you must consider several factors. We'll get into those in this section.

Getting started: a minimum for board reporting

What's the base for what you must include in your reports to the board of directors?

At a high level, the board is concerned with the company's financial performance. They need the confidence that you're making the right moves and taking the right steps.

So here's a bare minimum every successful CFO prepares before walking into that board meeting:

• Financial statements: Your company's three financial statements (the income statement, balance sheet, and statement of cash flows) are super important. As the CFO, you must be familiar with every item on those, especially expenses like OpEx and CapEx, which many disparate expenses comprise.
• Good news and bad news: You need to share both the positives and the negatives. The good news should serve your company's narrative. The bad news should too.
• Summary of quarterly and annual reports: Is the business performing to plan? What's the projection if this current level of performance continues? What deviations do you expect to see from now until the end of the planned period?
• Key performance indicators: Create a reference document with the company's KPIs and any additional metrics or financial ratios you know the Board will want to see. For example, EBITDA, runway, and burn multiple are a few of the examples you'll want to include.
• Talk tracks and the company's financial story: There's an opportunity in your financial reporting to make the Board bullish on your company. What story do these numbers tell? What change is your company making, and how does the financial data give context to that? If the CEO report is visionary, then your report needs to supply data and context.

Who are the board members?

The personalities that comprise the board of directions are a big factor in how you present your information.

For example, one board member might be good at zeroing in on your weak spots. How do you report to that person? By being honest about those weak points and having a plan to remedy them in the upcoming quarter(s).

Another board member might be super interested in quantifying financial performance in terms of financial ratios. So you need to know which ratios and metrics they want to see.

Plan early (When is the board meeting?)

You should start planning for the board meeting as soon as the previous one is finished.

No, really. A long-range view of planning will make your life that much easier.

After all, your job is to do more than simply present information to the board.

You want to sell them on the company.

So this means pulling out all the planning chops: begin early.

Previous expectations (Look at earlier board reports)

If you or your predecessor presented something in a previous board meeting, you need to include it again.

Even if that's to explain why you're not including it.

(For example: there's a better metric, and here's why it's better.)

Remember: no surprises from the CFO. It's your job to anticipate expectations and have an answer to them.

Of course, you can (and should) ask the Board whether they found something helpful before cutting it from your report.

What's in a good board report? Tell the story of the business.

Let the board report template out what you're going to say and how.

So you should build your board report structure to support the story you're telling about the business.

This begins with knowing the story you want to tell about the business.

Your CEO should drive this, so make sure you're clear on their narrative before organizing your slides.

The top 5 mistakes CFOs make when reporting to the board

Reporting to the board is a skill, but it's also a relatively high-stakes situation.

So what are the common mistakes to avoid?

We asked our CEO (a former CFO) and an investor to devise a list of common pitfalls for CFOs to avoid. Here's what they said.

Mistake #1: Data dumping instead of storytelling

We love charts and graphs. They give people a visual way to interpret and understand numbers and trends.

Up and to the right? Everybody knows what that means.

But even charts and graphs are guilty of data dumping.

So you need to be hyper-intentional about what story you're telling. Then you can pull the data—as charts and graphs—to support that story.

Here are our tips for best presenting financial information and raw data:

1. Answer "so what?" upfront: Board members' time is limited. So tell them why this matters, support that with KPIs, and back it up with the raw data.
2. Send your KPIs in advance: Give the board members time to review your KPIs, at least a week in advance. Let them be familiar with those KPIs so they know the context when you include them in your story.
3. Chart your financial statements: Although reader sophistication varies, cognitive load doesn't. Make your finances as easy to understand and digest as possible.
4. Don't data dump: Most of the data should live in an appendix or separate financial package. The data in the board deck should be a minimum effective dose and nothing more.

Mistake #2: No surprises. Not having a plan for delivering bad news

The CFO is the "no surprises" role.

As the gatekeeper of the company's finances, you need to be intimately familiar with everything on your financial statements.

That includes the bad news.

...but bad news happens, so what's the best way to deliver it?

Here are some quick tips for delivering bad news:

1. Communicate ahead of time: You're not here to deliver surprises. You're here to be transparent—remember, the board is here to help you. If there's bad news, you must inform them ahead of time. Coordinate with your CEO and give the board time for discussion and questions in advance.
2. Develop a plan with your team: Including the executive and finance teams. Understand "why" this happened and develop a "what to do" to fix or prevent future mistakes.
3. Send the deck the week before the meeting: Remember: no surprises from the CFO. If you're not regularly communicating with the Board, sending the deck and a monthly financial report a week in advance builds trust and gives the board members plenty of time to prepare their questions.

Mistake #3: Failing to win buy-in from the Board

The quarterly or annual board report is an opportunity to help the board understand your company's story.

If the CEO is the chief executive hype officer, the CFO is their right hand. You need to support the hype and secure buy-in from the Board committees.

One of the best ways to do this is to tap into why people joined the Board in the first place: they want to be involved.

So involve them.

Here are our top tips for getting the board invested in the entire organization, all over again.

1. The board works with you: The board isn't your "boss." They're here to support you.
2. Put the board to work: Your CMO will tell you about the power of a good call to action: ask the board for insights, introductions, stories from other companies, and so on. Treat the time after each report as a strategy session.
3. Don't crowd the board agenda: Leave time for 1-2 big, strategic discussions to leverage the board’s knowledge and support.

Mistake #4: Not having multiple plans

This goes back to scenario planning 101, but it's an important reminder.

Just like you create multiple what-if scenarios during your planning and forecasting process, you must have multiple versions of the plan to present to the board.

This does two things:

First, it shows that you're prepared. You have plenty of plans.

Second, it's an opportunity to show off the company's performance or how well you know the team. If you're not hitting Board plan, at least you're hitting the company plan, which you know was realistic. Or if you're exceeding Board plan, you can show how individual teams are hitting their team plan, which was higher.

Here are our top tips for creating multiple plans:

1. A plan is not a budget: A plan has measurable results beyond money out and money in. What are the leading indicators? How is the plan followed throughout the reporting period?
2. Create multiple versions of your plan: We recommend three:
   1. Company plan: Realistic and achievable.
   2. Board plan: Ideally about 10% lower than the company plan.
   3. Team plan: Like revenue, this can be as much as 10% higher than the company plan.
3. Reforecast when necessary: Nobody hits plan 100% of the time. But if you're going to miss by a lot, then you should reforecast (and be confident of hitting that reforecast). One deep cut to your plan is better than missing multiple times in a row.

Mistake #5: Not being conscious that everything written is a record

The bullet points you provided on the deck are the easiest to remember. They're written down.

So besides ensuring that you write all the key points and relevant information, you should also briefly summarize your larger points--- especially the good news---in an appendix.

Here are our top tips for taking advantage of the written record:

1. Think towards future funding: Board decks can be recorded or used in consequent funding rounds. Words on paper carry extra meaning. How do you want to present your story in your next round of funding?
2. Sell the story to offset the risks: Don’t be an alarmist: present risks with mitigation plans. Sell the story of your business, not just doom and gloom.
3. Ask for help: Present what you want the board to help you with. This effective memory prompt leaves action items written down for the board to follow up on.

Bonus mistake: Not having support from their team

The CFO is not an island.

And even the best-prepared CFO will encounter questions from the Board that they don't know the answer to.

In those cases, you must deliver an answer as soon as possible.

Having a trusted team member on standby to deliver that data is extra important.

This is where board management software like Cube comes in handy. Because Cube lets you drill down into any of your reports.

So you can pull up Google docs and ask Cube to drill down into the raw data, all in real time.

Support from the team lets you have more productive, real-time conversations with the Board. It also builds trust and confidence in you as the leader of the organization's finances.

Here are our top tips for organizing support from your team on the side:

1. Communicate ahead of time and schedule it out: Make sure your team knows when the board meeting is and when you're presenting. Put a hold or reminder of their calendar and communicate in advance over Slack or whatever internal communications system you use. Make a contingency plan for any anticipated OOOs or day-of emergencies.
2. Brainstorm with the team and prepare: Nobody knows your weaknesses better than your team, so ask them, "what questions are we ill-positioned to answer?" Then use your extra time to get the legwork done on preparing an answer.
3. Set up your tech for easy day-of reporting: Google Docs is amazing for sharing real-time reports. If you're using a tool like Cube that integrates with Excel, Google Sheets, and your source systems, you can have a custom report built in minutes and be confident in its accuracy.

And those are our top tips for preparing for the board meeting.

Our favorite board management software for CFOs

The tech you use for board reporting can be the difference between a stressful meeting and an easy one.

So it's worth reviewing the tech stack.

Here are our recommendations:

1. Microsoft Excel: Your bread-and-butter. You'll use Excel for most of your data prep and have your reports set up there. Irreplaceable.
2. Google Sheets: Google Sheets comes with two key advantages over Excel: it's easier to share and executives favor it. Copy and paste your key takeaways into Google Sheets and make it easy for board members to take them home.
3. Google Slides: In addition to being more collaborative than Microsoft PowerPoint, Google Slides are easier for the Board to take home and review on their own time.
4. Cube: Cube simplifies the prep work. We know that FP&A teams spend upwards of 75% of their time on manual, no-value add tasks like cleansing and prepping data. Cube does that work for you, letting you reinvest that time into something more valuable like preparing talk tracks and pulling together your most important KPIs.

Conclusion: A stress-free board report

Now you have the tools and knowledge to create successful board reports.

And you're super prepared for the next board meeting.

And you might want to consider some board management software like Cube.

Cube is the first spreadsheet-native FP&A platform designed to keep CFOs and FP&A teams in their favored Excel environment while removing all the friction from the manual, time-consuming work that has to be done.

(Checking, cleansing, organizing, copying and pasting...you know the deal.)

Built by finance for finance, Cube works for companies of all sizes and industries.

Click the image below to request a free demo and see how it works and how it can help you.