The Board Reporting Playbook

[00:00:00] Intro: Welcome to Minutes by Boardcycle, where in each episode we pack the insights from one of Australia's boardroom leaders into just a few minutes.

[00:00:10] Today's podcast guest is Penny Winn, director of Ampol, CSR, Super Retail Group, and the ANU Foundation. Penny gives our host, Richard Conway, her top tips on how executives and directors should approach business performance reporting.

[00:00:29] Richard Conway: Hello and welcome to the minutes podcast. I'm your host, Richard Conway, and today I'm very happy to be joined by Penny Winn. Penny is currently a director of the ANU Foundation, Ampol, CSR and Super Retail Group. Prior to her non-executive career, Penny was a senior executive in a number of retail organisations, including Asda, Myer and Woolworths.

[00:00:50] Richard Conway: Welcome Penny.

[00:00:51] Penny Winn: Thank you, Richard.

[00:00:52] Richard Conway: So Penny, today the topic I wanted to discuss with you is business performance reporting. And I wanted to discuss that [00:01:00] because it's very clearly and obviously critical for a board to receive clear information about how its business is reporting, but really outside of financial reporting, there aren't a whole lot of standardised ways of doing that.

[00:01:15] Richard Conway: So to start with, Penny, I wanted to ask as someone who's been on both sides of the board table, what you're looking for now in performance reporting as a director and whether that matches what you were trying to communicate when you were an executive.

[00:01:29] Penny Winn: Thanks, Richard. I guess for me, sometimes it feels like what an executive is trying to communicate versus what a non-executive is trying to understand can be at cross purposes. So, as an executive, you often feel like, well, I'm getting my chance to go up to the board and I want to make a good impression and I want them to know that I've got it all under control because I've got this great proposal and it's all, you know, I've got it tied up with a big red bow, I've got it all under control and I want them to think, I want to walk away from that discussion with the directors [00:02:00] saying Penny's got it under control and she's very competent and she's very capable.

[00:02:04] Penny Winn: As a director, yes, I'm interested in knowing that you think you've got it under control, but I'm really interested in what's going to go wrong. And I think there's not enough honesty and openness. And if I could go back to my executive career and, you know, shape myself and say, tell them more about what's going to potentially go wrong and use the experience around the board table in how you're going to solve that.

[00:02:25] Penny Winn: Remember, the board and the management are actually on the same team, that we're out to do the best thing we possibly can for shareholders. So, it's not just about you just impressing the board, actually as an executive, it's about you getting the best outcome and the best solution.

[00:02:41] Penny Winn: So, if there's something that you are worried about, about a particular program, or a project, or a back M&A acquisition, you need to share that. You're not alone. Because the worst thing you can do is not share it and then come back after the fact that people say, well, this all blew up. Why didn't that come up?

[00:02:56] Penny Winn: You're better off sharing it and saying, you know, this can [00:03:00] possibly go wrong, this is how I'm thinking about it but have you got any other ideas? Don't think the board will think less of you because you haven't got all the answers. In fact, what we love is, you know, often to be engaged in solving the problem and sharing experiences.

[00:03:13] Penny Winn: Remember there's a lot of experience around that board table, a lot of P&L experience, lots of bruises. The best experiences you ever get in your executive career are actually when things go wrong. So you better use the things that have gone wrong for the board as your learning experience rather than learn it again through something going wrong that you've put up.

[00:03:29] Penny Winn: So I think, that openness and vulnerability for management, I think, would be something that we need to do. And also making sure that bad news travels faster than good as well. You know, as I said, when something goes wrong, you know, it'll often get caught up down in the levels of the organisation because people want to fix it.

[00:03:47] Penny Winn: They want it to be right. You can have that happening, but you've just gotta make sure that, you know, it's suddenly gonna appear on the, on the, you know, on the ABC 7:00 PM news or come up on social media. That it's been escalated as it's gone through the organisation.

[00:03:59] Penny Winn: [00:04:00] So I think, there's some of the key things, you know, just use the board as part of your way to solve some of the riskier nuttier problems of the proposal that you've got.

[00:04:08] Richard Conway: Yeah, absolutely. So Penny, I wanted to ask you about dashboards as a way of doing performance reporting to boards. It's a very common way of giving analytical information in particular. So how do you find those, in terms of effectively communicating performance to you as a director?

[00:04:26] Penny Winn: Look, I think they're one of the effective ways of communicating with the director. You know, you think about information, it's quantitative information and qualitative information and, you know, this provides a quant information that, you know, the statistics and the data. But what you're actually looking for also is a qualitative interpretation of that as well.

[00:04:45] Penny Winn: So I think you've got to, so it's one off. So it's, it's getting the data, but then also getting management's interpretation of the data. But then in addition to that, there are other things that we really need to, the directors try and do. Directors need to do their own investigation through [00:05:00] site visits, for example, asking questions of, you know, of the people, in the boardroom, but also people outside the boardroom. Reading, you know, being able to read the room, I think it's really important.

[00:05:10] Penny Winn: It's often, you know, often you'll get a proposal coming from one executive and you're looking at another executive who's got their arms folded and the body language is quite telling. So it's actually, you've got to be able to do the softer stuff as well as the harder stuff. So dashboards are really, you know, you couldn't operate without them.

[00:05:27] Penny Winn: But they're not an exclusive be all and end all, to be able to solve all of your problems. I think that that's really important. So they're very useful, however.

[00:05:36] Richard Conway: Yeah, I guess one thing that I've noticed with dashboards is there can definitely be a kind of metric creep that happens metric overload. So and that can happen in my observation on either side of the equation. Management team, it's easy to just add more metrics into a report as a director. It's relatively easy to just ask for one more metric and it doesn't [00:06:00] feel like it's that big an ask each time it happens.

[00:06:03] Richard Conway: How do you know, as someone who's preparing this kind of reporting to a board when you've given them enough?

[00:06:10] Penny Winn: Well, I think one of the things that you can really push back on, I think, you know, because you can actually get too much information. And you know, sometimes you look at a report and say, why are we getting this information as a director? It's almost like you need a one in, one out, you know, when I was running the supply chain, you know, you had warehouse slots and you had a, you know, you had a 5, 000 warehouse slots, pick slots from in a warehouse.

[00:06:32] Penny Winn: If you're going to use, put in range that new line, it had to take that pick slot that something had to come out. And it's almost like one, you need to apply a one in one out type of approach to this, or at least on a regular basis, refresh this and say, are we really using it?

[00:06:45] Penny Winn: One of the things in, I do a couple of, we do on our boards is at the end of the meeting, I have a review of the papers and say, what is it we needed? What is it we didn't need? You know, what is it we could do without?

[00:06:56] Penny Winn: Because often these things have been get a good life of their own and you end up [00:07:00] with, you know, 800 pages of board papers of which, you know, 200 are probably a bit redundant because they've been asked for by one director at one point in time. I think there's also a role for the chair to play to say, you know, when a director asked for information, rather than say, well, let's get it on a regular reporting to actually say, well, do we really need that? Or maybe it's a one off thing that you report once and don't report again?

[00:07:22] Penny Winn: I think it's an important role for the chair to play to be saying, what information are we getting, that we don't need to get. And if you're asking for something extra, what value is it actually going to add?

[00:07:33] Penny Winn: And can, is there something we can take away? Because management's not there just to create reports for the board. It needs to be adding value and adding value to the decision making. I think, therefore, You know, a good time to review the, review what goes into these papers and what go, what, what reports are asked for is, you know, as you go through the strategy cycle, as you go through and you say, okay, well, the plans for the year, we're going to double down on this, we're going to double down on that.

[00:07:57] Penny Winn: Are we getting the right stats to do that? [00:08:00] And if so, what, if not, what extra things do we need? and as we have, lightened off on a couple of other things, let's now say, well, we don't need as many stats or pieces of data on those pieces that we've now ticked off and said we're doing.

[00:08:13] Penny Winn: It's just that on, you know, that constant review, be it at the board level, be it by the chair, but also as part of the strategy cycle as to the information that you need to really drive the business moving forward.

[00:08:25] Richard Conway: Yep. I think you've, you touched on this in the context of directors asking for things that other directors may not necessarily be that interested in. I guess, sometimes when directors are asking for something, it's a reflection of their expertise or appetite for detail in a particular area.

[00:08:43] Richard Conway: Given that different directors will have different views on that, what's the best approach for an executive to make sure that what they're reporting does satisfy the whole board, and particularly, some of those directors who do want to dive in a little bit deeper on a particular [00:09:00] area?

[00:09:00] Penny Winn: Yeah. I think one of the things that directors need to be cognizant of is that you need to probably be leveraging the stuff that management already has, as opposed to asking for new information. You know, remember, you know, for me as a retail director, I might, I might want to look at wage percentages and a whole lot of other things.

[00:09:18] Penny Winn: But if it's not a key metric that management in this particular firm, in this particular industry operates or needs to operate on, you've got to be told, well, actually, that's not a, you know, not a stat that we actually use. I mean, in the recent government submission, you know, somebody, you know, I know Brad Banducci was being asked about return on, what was it, return on equity, which it isn't a stat that actually is used to run the business in the retail organisation.

[00:09:42] Penny Winn: So there's a good dialogue that needs to happen between both the management team and the chair on these directors that actually ask for stuff that's outside the, the remit. Because if it's not written, if it's not the way that the company is to be managed or needs to be managed, then you shouldn't be asking for the [00:10:00] information, shouldn't be bogging management down.

[00:10:01] Penny Winn: And I think there's a role to play for the management to push back in that instance, to say, well, why do you want it? And if they do ask for something, well, that's actually something we do provide, we can give it to you and we can give it to all directors.

[00:10:11] Penny Winn: It's something we look at, might be a bit granular, we might look at it for once or something, but don't embed it in the ongoing reporting and don't add stuff that's not actually part of the key dashboards of the management team, I would have thought.

[00:10:24] Richard Conway: Yeah, absolutely. And then, finally Penny, I wanted to ask you if you were a leader in the business who's been asked to prepare their first ever performance report to a board, what would be your top tips to that person to get that right?

[00:10:39] Penny Winn: Okay, so firstly, tell it like it is. Don't say everything is under control. You need to share the challenges and, and the opportunities. And importantly, utilise the board expertise, if you want to get a problem solved. As I said earlier, boards and management are aligned in wanting to do the best thing for the organisations.

[00:10:55] Penny Winn: They're not there to mark our own work. The next thing is when presenting, don't, [00:11:00] don't you know, there's one of the most frustrating thing is if you put this wonderful paper, executives put wonderful papers out there, the board spends a lot of time reading it. So we've already all spent a lot of time coming up to speed.

[00:11:10] Penny Winn: The best use of the time that you've got in front of the board is actually not representing the paper. It's, it's in the interaction. The probing and the questioning. So you're better off to say, I'm actually taking the paper as read, and really do that, because often people say, I'll take the paper as read and then walk through every slide.

[00:11:27] Penny Winn: You take the paper as read, you might say, and the three key things you need to think about today are this, this and this, and then go to questions. If you've got a 20 minute slot and there's no questions after 10 minutes, don't think that's a fail. That's actually, you've done a really good job with your board paper.

[00:11:43] Penny Winn: You've done a really good job with answering the questions and the board is happy to generally to approve that. So don't think that's a fail. You've made a really good impression. In fact, you know, often agendas are tight. And there's one thing the boards get very restless about is if presentations go on too [00:12:00] long because people are laboring points that they already get.

[00:12:03] Penny Winn: So I think it's really important to be comfortable with a, with a short stint in the boardroom.

[00:12:08] Penny Winn: As I said, focus on the risks about what can go wrong, you know, focus on, call out, call out the things that can go wrong, how you're thinking about tackling it and, but, but leave, leave space, leave space for questions.

[00:12:19] Penny Winn: The last thing is read the room. I mean, when you're in with your exec colleagues, you'll often see people you've lost along the way. Then you can, you can also do that in the board if you, if you're not list, if you're not able to read the room, so read the room. If people are fidgeting, you know, that they, you they wanna move on, just move to questions.

[00:12:38] Penny Winn: If someone looks like they're a bit distracted, you can actually say, well, you know, Richard, I've had this problem in, you know, you've had this experience prior, what do you think about this? You know, use the board and use them as a way of solving your problems.

[00:12:51] Penny Winn: And, and certainly put, put it back on them. They're not, they shouldn't be just passengers sitting there just waiting for the, you know, the cup of tea and the sandwich at the end of the day. They, they actually [00:13:00] should be there actively engaging with you on that. But don't, my biggest thing is don't try and say everything's under control.

[00:13:07] Penny Winn: Don't try and take up all the oxygen in the room and just be open and responsive to questions and use the board as a great resource to get your problem solved.