Case Study One:

Mark (not his real name) was a senior human resources manager for a large multi-national company.
He was asked to present the company's HR strategy to the board at a one day strategic retreat. Mark worked hard and wrote a great board paper outlining the move to competency based frameworks and the expected results of this upon the ability of the company to attract and retain the best staff. Pay scales, promotional arrangements and leadership development were all covered in detail.
Mark failed, however, to justify his presentation in line with the board's primary objective-profit.
He failed to relate the need for the best staff to the need of the company to compete for scarce qualified human resources from a small pool of skilled individuals. He also failed to explain that the philosophy of management was that the best people would provide a competitive advantage by allowing the company to perform better than its rivals.
He assumed the board would understand this. They would have understood if they had been initially informed- but they had not been and therefore it was difficult to understand. The board viewed his presentation as a poor attempt to justify a large budget that was not directly related to generating profit.
To make matters worse Mark read his paper to the board. They had already read it themselves!
He board was bored stiff.
Mark did not make eye contact or engage the directors in his presentation. He just read to them for an hour. He had practised and worked through the key points of his paper in the exact time allotted.
The board subsequently cut the HR budget and Mark was offered a ‘lateral demotion' in the next corporate restructure. He left soon after.
Up until that catastrophic presentation he had been recognised as one of the next leaders of the company with a real chance of leaving HR to become a general manager and possibly a C-Class executive. After the presentation he was shunned by the people who had formerly supported him and although he could not have failed to know that the presentation was the cause of his new ostracism, he was never given a second chance at that level. It was safer for his bosses to ensure that he was never seen by the board again.
Nobody prepared him to effectively present and nobody helped him when he failed to do well in a presentation to the board.

Case Study Two:

Two recent court cases in Australia highlight the importance of effectively presenting to boards to avoid future risks.
Firstly, in the James Hardie case (NSW Supreme Court decision in Australian Securities and Investments Commission v. MacDonald (No. 11) 2009) ASIC alleged that executives, including the CEO, Company Secretary and General Counsel failed to advise the board that a stock exchange announcement was worded "in too emphatic terms".
The court agreed. The court also found that the CEO and CFO failed to discharge their duty of care and diligence by failing to advise the board that reviews of the proposed course of action were limited to the logic and legality of the course and did not consider the appropriateness of the underlying assumptions.
It is obvious from this case that there is a responsibility upon executives presenting in boardrooms that is as great as, if not greater than, the responsibility of the directors who will make decisions based upon those presentations.
Secondly, in the OneTel Case it was alleged that the executives ‘profoundly misled' the board as to the true state of affairs of the company. After a long and detailed court examination the court held that the executives had not misled the board. The board reports and presentations had been sufficient for the directors to have formed a correct view of the financial status of the company.
In the James Hardie case much attention has been focussed on the reputational damage, legal costs, fines and banning orders (a court prohibition on being involved in the management of a corporation which effectively prevent individuals from returning to their former employment even at a different or smaller company) imposed on the directors.
The executives were found guilty of more offences than the directors and faced larger fines and longer bans. The lack of public interest is not a reliable indication of leniency.
In the OneTel case there were potential liabilities for $92 million stemming from actions taken subsequent to the board reporting that was the focus of the court's inquiry.
Presenting in the boardroom is a high risk activity and one that should be undertaken only after proper and careful preparation.