Questions to Ask Board of Directors
Questions to put to a board of directors, useful for an executive who reports to one, a manager presenting for the first time, or an incoming director. They cover what the board decides itself, what it delegates, which numbers it watches, how it wants bad news delivered, and how it oversees the chief executive.
The questions
Open any question for the note
What does this board decide itself, and what is delegated to management?
Why ask it
The delegation of authority is the most useful document for anyone reporting to a board, and it is often years out of date. Where board and management privately disagree about who decides, the disagreement surfaces at the worst possible moment.
What is on the reserved matters list, and when was it last reviewed?
Why ask it
Approval thresholds for spending, hiring, borrowing and new markets go stale as an organization grows, so a limit set five years ago may now cover routine purchases. The date of the last review tells you more than the list does.
What does the board want from me each quarter, and in what format?
Why ask it
Boards range from a two-page dashboard to a fifty-page pack, and guessing wastes weeks of preparation every cycle. Asking also lets you propose something shorter, which most directors want and few request.
Do you want exception reporting, or a full narrative every time?
Why ask it
Directors differ, and the honest answer is usually a compromise. What you are establishing is whether they want you to flag only what has moved, or to walk through everything whether or not it changed.
Which numbers does this board actually watch?
Why ask it
Every board has three or four figures it genuinely tracks, and they are not always the ones in the strategic plan. Reporting against those rather than the ones you prefer removes most avoidable friction.
What does the board consider its biggest risk right now, and who owns it?
Why ask it
The named owner is the important half of the answer. A risk register where every line belongs to 'management' is not oversight, and boards that cannot name their largest risk tend to meet it as a crisis.
When did the board last change its mind because of something management brought forward?
Why ask it
This tests whether the board can be persuaded. One that has never changed direction on the strength of management analysis is either not being brought real choices or not listening to them.
How does the board want to receive bad news, and how quickly?
Why ask it
Every board says immediately and then behaves differently. Ask for a mechanism, a call to the chair, a note before the pack, a standing agenda item, so that the first bad news is not also a procedural error.
What is the board's expectation on capital allocation: growth, margin, debt, distributions?
Why ask it
This is where a board's real priorities show, far more clearly than in any strategy document. Directors who have not agreed on it will send contradictory signals about every investment you propose.
Which competitors does the board watch, and why those?
Why ask it
The comparison set reveals how the board understands the business, and it is sometimes several years behind the market. If they name companies you no longer lose to, closing that gap early is worth the awkwardness.
How is the chief executive evaluated, against what, and how often?
Why ask it
Measures and frequency together show whether evaluation is real. An annual review with no written criteria rests on relationships and on whatever happened most recently, which is not oversight.
How is succession handled, for the chief executive and for the chair?
Why ask it
Succession is easy to defer and painful to improvise. Ask specifically whether a written emergency plan exists, because that is the version that actually gets used.
What is the board's view on how much cash we hold and how much leverage we carry?
Why ask it
Views diverge sharply between investor directors and independents, and the range is rarely stated out loud. Establishing it early stops a proposal being refused on grounds nobody ever put in writing.
Where do independent directors get information other than from management?
Why ask it
A board wholly dependent on the management pack cannot challenge it. Site visits, direct access to the finance function, customer conversations and outside advisers are all signs of a board doing its own work.
How do executive sessions work, and what gets discussed without management present?
Why ask it
These sessions are normal and healthy rather than a slight. What matters is that they happen on a schedule, that someone reports back what came out of them, and that they are not the only place real discussion occurs.
Which committees exist, what do they decide, and what returns to the full board?
Why ask it
Committees drift into deciding matters the full board still believes it decides, particularly on pay and audit. Ask for the charters and for the list of what actually comes back for approval.
When was the last board self-assessment, and what changed as a result?
Why ask it
The second half separates a board that reviews itself from one with a review filed somewhere. If the last assessment changed nothing, the next one will not either.
What happens when a director has a conflict of interest?
Why ask it
A working process has steps: declaration, recusal, a minuted decision. If the answer is that everyone knows each other's interests already, there is no process, only goodwill.
What would make this board lose confidence in a management team?
Why ask it
The answer names the failure modes that matter to them: a missed forecast, a compliance breach, a key departure, being surprised. Surprise features in most honest answers, which is a strong argument for disclosing early.
What does the board know about this business that management does not?
Why ask it
Directors hold history, sector experience and outside networks that management routinely undervalues. Asking makes them contribute it instead of holding it, and the answers often include a customer relationship or an old mistake worth hearing about.
Working with a board of directors
Practical guidance for the conversation itself
Before you take something to the board
- 1Send anything numerical at least a week ahead. Boards discuss what they have read, and material handed out in the room gets deferred to the next meeting.
- 2Decide whether you want information, discussion or a decision, and say which at the top of the paper. Most poor board meetings come from an unstated ask.
- 3Bring options with a recommendation rather than a single course of action. A board asked to approve one option will invent alternatives in the room, usually worse ones.
- 4Brief the chair beforehand on anything difficult. Surprising a board, even with good news, costs credibility that takes a year to rebuild.
- 5Write the decision down as it was made and confirm it in the minutes. Boards and management remember the same discussion differently within a fortnight.
Where boards and management usually collide
Authority
Arguments about who decides are almost always the product of a delegation schedule nobody has read since it was drafted. Reviewing it once a year is unglamorous and prevents most of them.
Detail
A board asking for more detail is often signalling that it does not trust the summary rather than that it wants more pages. The fix is usually a clearer explanation of variances, not a longer pack.
Bad news
What damages the relationship is rarely the result itself but the timing of the disclosure. A board that learns of a problem from a third party will begin checking everything else you tell them.
Signs a board is not doing its job
- No director can name the largest risk without looking it up.
- The chief executive sets the agenda and the chair simply endorses it.
- Committee reports are received without questions, meeting after meeting.
- The chief executive has not had a formal evaluation in over a year.
- Independent directors have no source of information beyond the management pack.
- Disagreement, when it happens, is treated as disloyalty rather than as part of the role.
If you are new to reporting to a board
Ask for the last four sets of minutes and the last four packs before you write your first one, then copy whatever format clearly worked. Find out who the chair speaks to before a meeting, since that conversation usually settles the difficult items. Meet each director individually in your first two months and ask what they want to see and what they currently distrust in the reporting. Two things build credibility faster than good results: forecasting accurately, including the bad quarters, and telling the board something before they hear it elsewhere.