Briefing a board on reputational risk

When a reputational issue reaches a board, directors have limited time and a decision to make. They may be considering an acquisition, a new partner, a market entry or a response to press enquiries. The research behind that decision can be extensive, and the temptation is to present all of it. A briefing that does so tends to bury the answer. Directors need a clear account of what is known, how reliable it is, what it means for the decision in front of them and what remains uncertain.

Lead with the answer

The first paragraph of a board briefing should state the conclusion and the decision it bears on. If the research found nothing of concern, say so, and say how far the research went. If it found something material, state it plainly and explain why it matters. A director who stops reading after the first page should still understand the position.

Length works against clarity. The main briefing should run to a few pages at most. Source lists, chronologies, ownership charts and detailed findings belong in annexes, where those who want to test the analysis can find them. Brevity in the main document is a discipline for the authors as much as a courtesy to the reader.

Separate fact, assessment and open questions

The most useful thing a briefing can do is keep three categories apart. Facts are matters established by documents or reliable records, such as a court judgment, a registry entry or a published regulatory decision. Assessments are judgements drawn from those facts, such as the likelihood that a past association will attract press interest. Open questions are matters the research could not resolve.

Mixing these categories is a common weakness in reputational reporting. An allegation repeated in several media reports is still an allegation. A plausible inference remains an inference. Each assessment should carry a stated level of confidence and a short explanation of what it rests on, so that directors can see where the analysis is firm and where it is thin.

Scenarios, candour and tone

Reputational risk concerns how others may react, and that cannot be forecast with precision. Describing a small number of plausible scenarios is more honest than offering a single prediction. A scenario might set out how an issue could surface, who would be likely to raise it and what the consequences might be, with some indication of which outcomes are more likely and which are less likely but serious.

Candour about gaps matters. If records in a particular jurisdiction could not be obtained, or an important point rests on a single source, the briefing should say so in the main text, where directors will see it.

A board can work with uncertainty, provided it is told where the uncertainty lies.

Tone should be measured. Alarmist language invites overreaction and can draw attention to the very issue an organisation is trying to manage. Reassurance that goes beyond the evidence is just as unhelpful, because it leaves directors unprepared if the issue later becomes public. A useful test is whether each sentence can be supported by the research behind it.

Anticipate the questions others will ask

Directors rarely keep a reputational issue to themselves. They may be asked about it by shareholders, lenders, journalists, employees or partners. A good briefing anticipates those questions and gives directors an accurate, defensible account of what the organisation knew and when. It also records what checks were carried out, which matters if the decision is reviewed later.

A workable structure

The structure below suits most board briefings on reputational risk, and can be shortened for simpler matters.

• Summary. A single page states the conclusion, the decision it bears on and the overall level of confidence.
• Key findings. The established facts behind the conclusion are listed, each with its source.
• Assessment. The briefing explains what the findings mean for the organisation and how confident the authors are in each judgement.
• Scenarios. Two or three plausible developments are described, with an indication of likelihood and consequence.
• Open questions. Matters the research could not settle are set out, with a view on whether further work would help.
• Annexes. Sources, chronologies, ownership charts and detailed findings are provided for readers who want to test the analysis.

We write board briefings to be read in a few minutes and tested at length. That means leading with the answer, keeping fact and judgement apart, and being as clear about the limits of the research as about its findings. The aim is a document that helps directors reach a decision they can explain afterwards.