Let me tell you a tale of two school districts’ very different approaches to presenting financial performance reports at their monthly board meetings.  District A takes a pretty traditional approach.  The District’s Chief Financial Officer (CFO) thoroughly reviews the multi-page financial report, consisting of rows and columns of numbers, with the board’s finance committee, which passes the report along to the full board in the monthly board meeting packet.  The CFO presents highlights from the report at the full board meeting and answers any questions the board might have.

District B’s approach is dramatically different.  The CFO takes the board’s performance monitoring committee through a very different financial report, consisting of two parts:  an easy-to-understand series of bar charts comparing actual to budgeted expenditures by major cost categories; and the traditional rows and columns of numbers as backup.  The full two-part report is sent to the board in the monthly meeting packet, but at the board meeting, the board member who chairs the performance monitoring committee presents the complete graphical report using PowerPoint slides. answering questions from board members.  The committee chair occasionally tosses especially complex questions to the CFO, but the chair is always well-prepared by the CFO to take the great majority of questions.  In fact, before the inaugural presentation by the committee chair using the new PowerPoint slides, she actually ran through the slides in a “dress rehearsal” involving the superintendent, CFO and a couple of executive team members, who threw a number of pretty specific questions her way to get her comfortable with the report.

District A’s traditional approach is a classic example of failure to capitalize on the full potential of a key governing tool, in this case financial reporting – of, to use a somewhat grim metaphor, killing only one bird when three can be bagged.  By contrast, District B’s approach bags all three birds, ensuring a much richer return on its investment in financial reporting.  So what feathered friends are we talking about?

District A bags the traditional bird: carrying out the board’s formal fiduciary responsibility for overseeing the District’s finances – by making sure the CFO walks through a comprehensive, accurate financial  report with the board’s finance committee and by sharing that report with the full board.  But District B has designed its financial reporting process to kill two additional, very important feathered friends:  (1) a stronger board-executive team partnership; and (2) increased public support.  Making a full financial report at the monthly board meeting  that employs easy-to-understand graphics ensures that board members have a firmer grasp of the District’s finances, and having the committee chair present the financial report at the full board meeting is a sure-fire way of promoting board ownership and ego satisfaction.  As every truly board-savvy superintendent knows, more knowledgeable board members who feel strong ownership and satisfaction make for better partners.

And District B’s having the performance monitoring committee chair present a thorough, easy-to-understand financial report at the regular monthly board meeting builds public confidence in the District, not only because of greater public understanding of the District’s finances, but also because of the perception of strong board leadership of the financial function.

About the Author: Doug Eadie

President & CEO of Doug Eadie & Company, Inc., Doug Eadie assists CEOs in building rock solid partnerships with their boards.

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