How to make a Scorecard for the Board of Directors

How to make a Scorecard for the Board of Directors

It is important that the company’s board of directors have systematized information that allows it to make the right decisions for the good governance of the company. It is the Council’s responsibility to provide itself with useful information for decision-making, defining needs and proposing improvements and formats for it. On the other hand, the company’s management team is responsible for providing such information to the Board. For this it is important to make a Dashboard that allows you to analyze the key metrics of the company.

Steps to follow:

1. The scorecard that the board of directors will have will be concise but with the possibility of obtaining cascading and interrelated information. Working on the TAM (Annual Mobile Trend) concept.

2. The dashboard will be presented with information on all aspects of the company: not only financial and economic information, but also commercial, market, organization-structure, industrial, etc. The objective is to obtain a clear and precise idea of ​​the situation and to be able to analyze the deviations that occur with respect to the budget.

3. It must incorporate the indicators (designed by the Board) that allow to control the fulfillment of the marked strategic lines. It must also include qualitative information on markets, competitors, trends, etc.

4. Constant periodicity in obtaining information. However, the channels must always be open. That is, the management team should be at the disposal of the Board of Directors for any clarification.

5. The scorecard will be reviewed by the board of directors. Frequency of meetings depending on the type of business and the situation of the company, the number of meetings to be held varies. However, the average would be between 6 and 12 annual Council meetings. However, the Board of Directors must be prepared for extraordinary meetings when the situation requires it.

Ralph Fixes

Just another guy obsessed with self-improvement, life, and business.

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