What the CFO Reports to the Board of Directors (Template Included)

Few moments are as crucial for CFOs as when you step into the boardroom to present financial reports. Behind your polished slides lies a complex web of preparation, regulation and potential pitfalls. From last-minute data discrepancies to translating intricate financial concepts, the road to these meetings is fraught with obstacles.

Yet, these presentations are an opportunity for you to clarify your company's course and build relationships with the Board of Directors. So what’s the most efficient way to prepare a board report and what should you include in it?

In this article, we examine what compelling CFO board reports include, how you can build them and offer a free template to ease the process.

Key Takeaways for an Effective Board Report

• Streamline board report creation with monthly financial reporting templates that make it easy for your accounting and finance teams to compile the data they need. 

• When designing your templates, consider the audience by creating reports that are simple to review and understand. Not all board members will understand accounting terminology. 

• Incorporate charts and graphs for quickly reviewing data, combine data sets to help viewers gain perspective and don’t include unnecessary data, which could confuse some board members. 

• Focus on developing a strong relationship with the Board to leverage their experience in guiding your organization forward.

What To Include in Your Financial Reporting Package for the Board

Crafting an effective financial reporting package is a crucial skill for CFOs looking to foster productive Board relationships. The best CFOs position themselves and their teams as trusted resources for the leadership team.

A well-prepared financial package allows the Board to provide valuable insights and perspectives on the company's financial strategy. There is a regulatory component to remember too.

Financial statements demonstrate to the Board that the company complies with federal and state laws, including Generally Accepted Accounting Principles (GAAP). Aside from statements, monthly financial reports serve as a valuable tool for the Board to assess a company's financial condition at a given point in time.

Here’s the key information that should be included in your board reporting package:

• A performance summary

• Balance sheet

• Income statement

• Statement of cash flows

• Profitability metrics

• Upcoming risks

• Strategic initiatives

• Targets for the following period

Let's unpack what a monthly financial report looks like.

Monthly Financial Reporting Template

The format of your monthly financial report depends on the information your Board needs. This is why it’s so important to work from a presentation template you can easily update over time.

CFOs may submit monthly reports with detailed information on multiple pages or summarize the most business-critical data on a single page.

Generally, visual aids such as graphs and charts can help board members more easily understand financial data. 

The following image shows the standard components of a simple monthly financial report CFOs typically use to present information to the Board (graphs and charts not included):  

Source: Early Stage Tech Boards

Your board presentation can feature the most critical information from this financial report.

Designing Financial Reports for the Board of Directors

Companies need to ensure their leaders have the information they need to make effective business decisions. You need to deliver this data to the Board as straightforwardly as possible. 

Here are some tips for designing effective financial reports for the Board: 

1. Focus on Strategic Discussions

Set up your report to facilitate strategic discussions and transparent conversations, rather than attempting to showcase every positive aspect of the business. 

According to Kim Eaton, Operating Managing Director at Vista Equity Partners and a member of Vena’s Board,transparency is critical to getting the most out of these meetings. 

“The most productive board meetings are when the Board can share [their] wisdom and help [the CFO] look around corners,” she says. “The only way to do that is to have that dialogue and understand what's behind the why of what the company might be facing or struggling with.”       

Kim says CFOs should acknowledge green status items (items that have hit their targets or are on track) briefly, but concentrate on constructive, open discussions, including items that aren't green. While recognizing successes is important, the board meeting should primarily focus on areas that require attention or strategic input.  

Create an environment for constructive dialogue about the company's direction and challenges. 

This approach allows for more meaningful engagement with the Board and better use of their expertise.

“It's important to acknowledge the things you don't know and show a little bit of vulnerability,” Kim says.

2. Consider Your Audience    

Not all board members instantly know the jargon or acronyms specific to your business. Many are not familiar with financial and department-centric terminologies. 

Consider the demographic of your audience and keep the format of your reports simple and easy to understand. Present a visual summary of data for board members to understand performance.

Brookfield Asset Management kept this slide simple and straightforward during their Investor Day presentation, communicating the impact of its decisions on the company’s position.

Source: Brookfield

Be sure to present information in a way that invites board members to leverage their expertise and networks. This might involve highlighting areas where the company could benefit from the Board's industry knowledge, foresight or strategic relationships.

3. Display Information for Easy Viewing

Present data in a clear and visually appealing way so the eye can easily track, interpret and analyze it. Use column charts, graphs and other visual aids to display data changes over any period and highlight comparisons.

Add summaries or comments to explain outliers or other clarifying information to help the Board understand the significance of the data.

Also, combine data sets to provide the Board with a clear perspective. For instance, include cash in both dollar amounts and as percentages of the company's total assets.

Highlight any accounts receivable fluctuations and provide information pending collections of any debts. Note any financial events the company may need to write off. 

4. Incorporate Multiple Perspectives

Use your report to bring more people into the conversation, not just the ones familiar with financial ratios. Include insights and data from various department heads or key team members to provide a more comprehensive view of the company's operations.

“Most boards are looking for balance,” Kim says. “I think there's an opportunity for the CFO to bring others into the conversation and provide perspective. This doesn't force [the CFO] to feel like they have to be the one to always expose either the positive or the negative.”

This approach not only enriches the report with diverse viewpoints, but also demonstrates the collaborative nature of the management team, fostering trust and confidence among board members.

5. Avoid Unnecessary Data

In some situations, your Board might specify the data they want to see in the CFO's report. Ensure financial reports reflect only accurate and relevant data to give those reviewing the reports exactly what they need.

CFOs must have relevant discussions with the Board before the presentation to understand what they want to see in the meeting. Avoid falling into the trap of showcasing as much data as possible and creating large presentations that drown out your message. Keep your presentation and data as focused as possible to steer the conversation along the right channels.

Many organizations provide the Board with detailed quarterly or annual reports, with a simplified overview of the monthly reports. However, when reporting monthly figures, have the data handy in an appendix to answer any questions the Board may have.

6. Demonstrate Problem-Solving Processes

Use your financial report to show how you worked through problems and solved them at a high level. Include examples of challenges the company has faced and the steps taken to address them.

This demonstrates the management team's ability to navigate difficulties and adapt to changing circumstances. It will also help you build a stronger relationship with the CEO and board members.

The example below shows how electric car company Tesla presented their approach to operating expenses and cash flow during an Investor Day presentation. 

Source: Tesla

By sharing both the process and the outcomes, you give the Board insight into the company's problem-solving capabilities and resilience—something they'll remember when making future-forward decisions. 

Building a Strong Relationship With the Board

Building a strong relationship with the Board is crucial for CFOs and requires a deliberate, ongoing effort. Trust and open communication are important to foster these relationships.

This approach creates an environment where challenging questions are welcome and seen as opportunities for growth rather than criticism.

Regular interaction outside of formal board meetings also plays a significant role. Take advantage of opportunities such as board dinners, networking events or volunteer outings to get to know members personally. Additionally, consider scheduling follow-up meetings or calls with individual board members to address specific questions or dive deeper into strategic topics.

“If you can have a personal conversation ahead of time, it makes tough situations easier to deal with,” Kim says. “When I was CEO, I would challenge executives to sit next to a board member they hadn’t spent much time with.”

Despite initial nerves, she says those interactions always helped executives communicate better during formal board meetings and offer context to their presentations.

Transparency and vulnerability are also key factors in building strong board relationships. 

Even the most experienced CFOs acknowledge when they don't have all the answers and view these moments as opportunities for collaboration. By demonstrating a willingness to learn and improve, you can create a more open and supportive dynamic with the Board.

Mistakes To Avoid When Reporting to Your Board

Here is a quick summary of what CFOs should steer clear of when presenting to the Board: 

• Don’t include irrelevant information that could veer your presentation off topic. 

• Don’t use company-specific terms or jargon. 

• Don’t add complicated charts and graphs that rely heavily on verbal explanation. 

• Don’t overcrowd slides with information. Use an appendix instead. 

• Don’t work off a presentation template that can only be used once. Use one that can easily be updated in the future 

Automate Your Financial Reporting Process With Vena

Automation simplifies your reporting process, streamlining monthly, quarterly or annual reporting to the Board. With Vena’s native integration with PowerPoint, you can create and update data-driven presentations in minutes and work closely with the entire C-suite, stakeholders and the Board of Directors.

Download our Executive Board Report kit here to help with preparing, managing and deploying your next executive board report with cross-functional team input.