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Boards Overseeing Key Agents Need Tailored Information

How to get smarter, strategy-focused reporting from third-party managers and operators

Boards don’t lack information—they’re drowning in it. The real challenge is knowing what matters and staying focused on it.

For boards overseeing key third-party agents—like pension funds, investment managers, or JV operators—the stakes are high. These agents play a critical role in executing strategy, managing risk, and delivering on mandates set by the board. Yet, many boards rely on whatever information is provided, instead of defining what they truly need.

A more deliberate approach is needed: clear reporting expectations, designed by the board, aligned with its oversight role.

Why Boards Need a Defined Reporting Framework for Agents

Although a defined reporting framework is helpful for all boards, it is even more important with third party managers due to the nature of their relationship.

• There is some element of conflict of interest between an agent and the board (as the client and in some cases their partners).

• The board will understand certain stakeholders better than the agent, and be under different pressures and expectations from those stakeholders.

• The board may have their own strategies and goals that are not fully consistent with the deliverables of the agent.

• Third party agents often have their own board guiding and overseeing their overall strategy and activities.

• Third party agents may have other clients that impact the agent’s activities and focus.

Use Reporting Expectations to Stay Focused & Strategic

A well-defined and deliberate reporting framework for key agents will help the board stay focused on their fiduciary, regulatory, and contractual obligations and on the strategic drivers of organizational performance.

When boards actively shape reporting frameworks, they force important governance conversations. These conversations are as important as the reports themselves.

• ⭐ Board Role – What is our role, and where are we most accountable?

• ⭐ Decision Points – What key decisions do we need to make?

• ⭐ Diverging Interests – Where might our interests differ from the agent’s?

• ⭐ Insight Drivers – What will help us understand performance and make decisions?

• ⭐ Agent Accountability – What information confirms whether the agent is meeting expectations?

• ⭐ Report Purpose – What does each report tell us, and why is it useful?

By establishing key categories and reporting rationale aligned with the organization’s specific risk, performance, and strategic decision-making focus areas, the board can increase its own clarity on what reporting it needs.

For example, the board is more likely to include the following in the reporting framework, whereas the agent may not proactively include them in their reports:

🔑 potential conflicts of interest and other topics where the board may be out of alignment with the agent; and

🔑 stakeholder expectations and reputational sensitivities that are understood better by the board than the agent.

A reporting framework can be built that sets out clear reporting expectations over a multi-year calendar that provides guidance to management and agents on what the board needs and why.

It can also reduce unnecessary detail and help the board avoid being drawn into non-critical areas. The natural guardrails of a reporting framework limit entanglement in less important issues that distract attention and waste important board time.

A defined framework also allows the board to monitor on an annual basis whether topics were covered by the agent.

Align Reporting to the Agent’s Role and Oversight Risk

Reporting expectations should reflect the expertise of the agent and the nature of the relationship.

For example, an operator that is a joint venture partner will likely be mostly aligned in interest with other partners. Investment agents may have their own board, auditors, and regulators. The board may receive reports from other third parties that support their oversight of the agent.

In these cases, the board may choose to reduce reporting detail or frequency — focusing instead on areas of strategic concern. This allows the board to use its valuable time wisely, and to more critically assess the materiality of the issue and relevance to its oversight role.

Final Thoughts

Defined and deliberate reporting expectations don’t create more bureaucracy—they sharpen board oversight. When thoughtfully implemented, they help directors govern with clarity, focus, and purpose—even in complex and dynamic organizations.

Some Problems That I Help Solve:

• Board reporting - clarity on quality and quantity of information to be included

• Board and management roles - understanding roles and responsibilities, and the sometimes grey line between strategic and operational decisions.

Free Tools & Guides:  

Guide:  Why the Board May Reach into Management Areas of Responsibility

Tip sheet: 5 Tips for Better Board Reports

Cheat Sheet: Recognizing Cognitive Biases in Board Reporting

Click the name to view and download. Or email me and I will send a copy to you ([email protected]).

I hope that you find it valuable. Feel free to share these tools with your connections.

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