The smart director.

• Author: Palmer, Russell E.
• Position: Information presentation and board of directors decision-making - Reprint from Directors & Boards, Spring 1993 - Putting In Place the Right Board for the 21st Century

The premise of Russell Palmer's article was that if you want directors to make good decisions, you have to give them good information. The value-added he brought to this subject was not only in examining what that information should be but in what form it might best be presented for director enlightenment. He draws his ideas from an impressive management and governance background. A former dean of the Wharton School and, before that, CEO of Touche Ross International (now Deloitte & Touche), he is chairman and CEO of The Palmer Group, an investment firm based in Philadelphia. At the time of the article's writing, he was a director of nine NYSE companies. His current directorships include AlliedSignal Inc., Bankers Trust New York Corp., GTE Corp., and May Department Stores Co, among several others, and he is a valued member of the DIRECTORS & BOARDS editorial advisory board.

LIKE ANYONE ELSE in business, directors need information to do their jobs well. But directors are in a peculiar situation. If your company wishes to improve the flow of information to its board, you should remember that directors are not full-time employees wholly immersed in the day-to-day activities of the firm. They have other positions, other duties, other demands on their time. The information that flows to directors relative to their board obligations must be pertinent, crisp, and as informative as possible. Directors have a limited amount of time in which to digest information, analyze it, and use it as a basis for fulfilling their responsibilities.

Information boards need to know include:

* Information that will enable them to prepare for board and committee meetings.

* Information on matters relevant to their oversight capacity. They need data to prepare questions and make sound decisions regarding critical issues. Hearing about something that has already happened at a subsequent board meeting that they should have been made aware of at the last meeting is a sure way to make board members grumpy.

* Boards should be kept abreast of important events involving the company. Board members don't like to be surprised by seeing something of importance in the newspaper about their company that they knew nothing about.

* Board members need general background information on the industry the company is in, on the competition, and on regulations that affect the firm.

Material that compares the company to its peers is extremely useful. If the director receives material with...