How 'triggers' can help boards focus on top-of-mind finance issues

A board’s time together is limited, and while a well-constructed dashboard can streamline discussions about financial data, there are likely more financial metrics than the board can discuss each meeting. But identifying which trends truly warrant discussion can be difficult, and allowing the board to decide which information to discuss in the moment can invite contentious (and time-consuming) debate.

Set trigger values to signal financial risk

To maximize a board’s time together, a few institutions have built principled discussion triggers into their board-facing dashboards. Discussion triggers are quantitative values for each dashboard KPI that, if reached, signal that the institution’s ability to sustain its mission is at risk. Incorporating concrete triggers into the dashboard establishes a clear system to determine which metrics a board should—and should not—focus on when they convene.

For example, finance leaders might conclude that a tuition discount rate above 50% is unsustainable and requires board action. If the institution’s discount rate crosses that threshold, it enters “alert” status and is automatically placed on the next board meeting’s agenda for discussion.

More ways for your board to use data: How Salisbury University is solving institutional data disparity

Principled discussion triggers in practice

Trinity University has included principled discussion triggers in its board-facing financial dashboard since 2013. When setting trigger levels, leadership considered seven years of historical data from Trinity and 33 peer institutions.

Leadership also incorporated external guidance on what constitutes a financially healthy institution, most notably Prager & Co.’s Strategic Financial Analysis in Higher Education. Trinity’s dashboard uses red dots to identify KPIs in “alert” status, as illustrated below.

Trinity University's Dashboard Discussion Threshold

Trinity dashboard

Trinity reports that its dashboard’s discussion triggers have changed the board’s attitude towards financial data. After working under the current dashboard format for a few years, board members now recognize the need to understand the factors causing metrics to enter “alert” status and work towards improving metrics on “alert” over the long-term.

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