4.

INFORMATION ARCHITECTURE
Click to edit Master subtitle style
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Boards that

4/14/12 INFORMATION ARCHITECTURE

Describes all of the ways the board gets information a) Communications from management in

preparation for board meetings or b) Planned visits by directors to company sites.

It specifies what kinds of information the board will get when, and in what

What is desirable information

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Differs for different directors criteria/relevance Right Information (Quantity/ Substance), Right Format, Right Time

What is undesirable information

Jargon Too much information Scripted Power point presentation

4/14/12 Effects of unarchitectured information

Desirable Situation

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Designing the Information Architecture

5 Channels

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4/14/12 Kind of Information

How money is made (long and short term) Measures that show companys progress or deterioration relative to the external environment Subjective information that reveals the assumptions and conceptual thinking underlying managements proposals and decisions

Channel 1: Click to edit Master subtitle style Board Briefing

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Board Briefing (An e.g.)

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Financial & performance information: Projections for each biz unit, once introductory page, easy for directors to penetrate the data and question nature of operating cash flow trends

HR report: Proposed change in organizational structure, analytical pros and cons of the change, save time to debate the change

4/14/12 Essential Ingredients

Financial information

Where is cash going, business by business? Where is cash coming from? How is cash allocated and why? Cash Flow : Companys historical performance, present condition, and future capabilities.

Performance indicators :

link between customers and cash flow

Managements commentary

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Management will commit time to produce thoughtful and accurate commentary

Should be candid/non sugar coated

Financial commentary gets directors mental wheels turning cut meeting time by >50%

Channel 2: Click to edit Master subtitle style Management Letters

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Management Letter

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A useful tool for communication between the CEO and the board of directors.

CEOs need to establish a way to keep directors informed about company affairs between board meetings.

What should it consist of ?

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FORMS

Essentials of a Management Letter

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Good Communication Skills Written letters concise, interesting and to the point. Oral Statements brief, informal and open ended.

Channel 3: Click to edit Master subtitle style Employee Surveys

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Employee Surveys

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Boards have an implicit responsibility to understand the company at employee levels.

One tool that can be used for this is Employee Survey targeted at specific topics that are important to company & board.

Boards can ask the management to carry surveys at the employee level by the third party to study company culture or the like at the time of merger

between two companies with different

Example

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At the time of merger/acquisition it was important for a company to know whether the two companies with different cultures will gel well at the employee level.

The

management

outsourced

Survey Results

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The integration was proceeding well, though there was ambiguity in the decision making of one business unit & criteria for resource allocation was not fully optimized.

The survey analysis gave the board direction on which areas to ask management about in forthcoming meetings.

Channel 4: Click to edit Master subtitle style Director Outreach

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Director Outreach

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Directors suppliers.

should

schedule

face

time

with

employees, division managers, customers &

Gives Directors a better sense for customer service, internal culture and the companys value proposition.

Regular site visits to manufacturing plants, retail outlets or satellite offices.

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What

if

burned

down?..All of a sudden, youd shut down an entire industry across the continent. Thats the kind a thing that doesnt come out unless you go out in the field and start asking field managers questions. To

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Internal & External Auditors

Important information sources Strengthening informal communication with

internal auditors helps open that channel.

Frequent meetings create familiarity making the staff more comfortable communicating with committee members.

Channel 5: Click to edit Master subtitle style Reports from Committees

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The work of the board needs to be4/14/12 divided, which is why the board has committees.

Role of the Committees

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Bring recommendations to the full board leaving the decision making to the full board. Recommendations need to be presented clearly with proper reasoning. Make sure the entire board debates and understands crucial issues. Undertake some of the nitty gritty work for which trust becomes an underlying basis. Saves time for the board to discuss more important issues.

Conclusion

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Tension:

Directors are requesting so much information on committee deliberations that the committee work is simply repeated in the board meeting.

Ways to make the board efficient:

Invite all directors to sit in on all committee meetings, to be open and inclusive for the more curious of the directors. Set aside ample time for the board to debrief the committees. Key facts should be summarized by committees

THANK YOU

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Bianca Luis (510) Caroline Fernandes (511) Deepti Kharpas (512) Rachael Alvares (543) Rahul Dsa (544)