24/06/2015

By Jon Coker, Partner at MMC Ventures


As an investor in tech businesses I spend a lot of time working with the founders of the young businesses I invest in, helping them manage and develop their businesses, some of which is giving guidance on the more admin-heavy tasks that founders have never undertaken before. An entrepreneur asked me recently what I thought ‘good’ looked like for a tech business board pack. For the unfamiliar - a board pack, in its most simple form, is a group of documents highlighting important information, to be sent to the board prior to a board meeting. The following is meant as a guide:

Purpose of a board pack:

The most essential thing is that the board pack reflects what the leaders in the business think the really important information is. The board pack should reflect the personality of the company and the key objectives the executive team is focused on. It should be used to inform the board ahead of time so that the real issues and opportunities are the focus of the conversation. The board pack is also an effective tool in driving as much value from your individual board members as possible. Overall it is to provide a robust and relevant reporting framework for the CEO

Best Practice:

• Circulate the board deck 1 full working day ahead of the board. Expect all board members to have read the deck in detail ahead of the board
• One person owns the Board deck and is responsible for the contents and when it is sent
• Board deck should be a set format that is repeated every month with the board agreeing to iterations when needed. It should be a summary of internal management reporting so that it does not take long to produce or need much extra work
• The board deck should be a single document PDF so it can be read easily on any device
• There should be regular deep dive sessions at the boards added to the agenda. Information for the deep dives can be added to the deck or circulated separately

Contents of a board deck:

• Cover page (Mission statement or any other guiding principals that the company operates to)
• Agenda
• Executive summary from the CEO (highlights, lowlights, key challenges, key ask from the board)
• Profit & loss, cash flow and balance sheet. Porfit & loss(month and year to date vs budget, last re-forecast, prior year). Cashflow (start with Earnings before interest, taxes, depreciation, and amortization (EBITDA) and work back to cashflow in month with notes and commentary). Balance sheet (noted balance sheet (i.e. Debtors, creditors and other key items noted))
• 12 month rolling profit & loss forecast
• 12 month rolling cash flow forecast, table and chart. Run 3 scenarios with the forecast overhead but no new business, 50% of forecast new business and on forecast
• Funding update (timing of likely cash need, bank discussions, investor discussions)
• Customer success key performance indicators (go live stats versus closed business, usage stats, lost customers, net promoter score, chart tickets (total and per £monthly recurring revenue))
• Product roadmap and update (product strategy discussion points, tech debt & bug fixes, existing product upgrades, new products) (cost and potential revenue measures)
• Marketing (key initiatives, table detailing lead generation and cost, some measure of lead success)
• New Business (win & loss analysis, pipeline progression and close cover analysis, individual sales person performance, rolling 6 month close forecast including coverage)
• Operations (hiring update – new hires, leavers (inc reasons), open positions, 12 month rolling hiring plan, cost per hire, training process)
• Strategy, competition and market review (once per quarter check the key direction of the business and review major decisions e.g. Geographies, verticals etc)
• Month priorities and review actions for board members

Though this may seem like a lot of work, once the structure is set in place, the board pack should become more a task of maintenance. In total it should be somewhere between 15 – 20 slides that need updating with up-to-date figures and few evaluative, text bullet points. Furthermore, an up-to-date and well structured board pack can ensure that board minutes simply need to be a short summary with reference to specific areas of the board pack for reference.

The board pack is an invaluable tool to ensure the board and top-level staff are consistently updated and included in the review process. It is also a good reminder to consistently analyse the performance of the business from different angles - monitor successes and highlight inefficiencies.