Due to the tough budgetary climate, board members are increasingly interested in the financial health of the institution. In 2014, a majority of board members at both public and private institutions identified fiscal sustainability and affordability as their top two priorities, and board support staff report a related increase in financial reporting requests from board members.
What is the right financial information to share with boards?
Communicating meaningful financial information to boards, however, is a tricky balancing act. Too little information can cause board members to misinterpret the institution’s true financial position or distrust administrative leaders, while too much financial information can cause them to focus on less significant details or disengage due to data fatigue.
Related: Read the full study Selecting Core Performance Metrics
The Effect of Information Quantity on Board Engagement
Dashboards help leaders communicate
Fortunately, financial dashboards offer an established and accessible solution to higher education’s financial communication challenges. Financial dashboards can have the most impact by leveraging three tactics:
1. Visualize and contextualize a limited selection of critical metrics
Limiting the information the dashboard contains ensures that board members focus on the most important metrics and strategic imperatives. Visualizing metrics alongside contextual data also helps users understand and make effective judgments about data trends.
2. Support board members with supplementary resources and regular updates
Providing narratives and supplementary data alongside dashboards ensures users interpret KPIs uniformly and accurately. Periodically updating different indicators—at least prior to each board meeting—maximizes a board’s time together, as members are able to focus on the most timely metrics during each meeting.
3. Minimal modifications can engage academic leaders in financial descisions
With minimal modifications to board-facing dashboards, institutions can more effectively engage academic leaderes in institutional finance and build a culture of trust and transparency.
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Selecting Core Performance Metrics