Annual Board Report Checklist

  • By: OnBoard Meetings
  • October 19, 2021
Checklist for Creating Your Annual Board Report
Reading Time: 5 minutes
Checklist for Creating Your Annual Board Report

Annual board reports come in all shapes and sizes. What should be included in yours? Explore five factors to consider when creating your board annual report.

The end of the year is quickly approaching, which means it’s the right time for boards of directors to start thinking about crafting their annual board reports.

When you hear the phrase “annual board report,” your first thought might be of printed booklets produced by publicly traded corporations, filled with financial reports and graphs. This certainly isn’t wrong; however, annual reports are common at organizations of all types, from publicly traded corporations and financial institutions to higher education organizations and nonprofits.

While annual reports are common across all types of organizations, no two reports are the same. Instead, the content and format of annual reports varies widely. Some are data-centric, some are narrative, and others are more visual in nature. 

What should your board’s annual report include? Read on to learn more about the common components of annual board reports and five things your board must consider when creating yours.

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What's Included in a Board Annual Report?

The content of an annual report depends on many factors, including organization type, industry, and legal and compliance requirements. However, there are components that are common across different types of annual reports.

In general, all annual reports provide an overview of the previous year. This includes key accomplishments as well as challenges. For example, a nonprofit organization such as Make-a-Wish Alabama might highlight how many wishes they granted for children with critical illnesses. Oftentimes, annual reports provide a vision for the year ahead, too. 

Annual reports typically start with an introductory letter. The letter typically comes from the top ranking executive at the organization (such as the CEO or founder) or someone from the board (most often, the board chair). 

Nearly all annual reports include information to let readers know how the company has performed from a financial standpoint and if and how much the company has grown. For a for-profit corporation, this might include financial statements including (but not limited to):

  • Balance sheet
  • Income statement
  • Cash flow statement

Publicly traded companies must also include information on the market price of shares, as well as dividends paid in their annual reports. 

On the other hand, the financial portion of a nonprofit annual report might include information on how much the organization raised over the past year, as well as a list of donors. In addition, nonprofit annual reports often include a breakdown of how funding was used so readers can see how much was spent on programs — and how much went toward operational expenses. 

Checklist for Your Board’s Annual Report

Clearly, there’s no one-size-fits all formula for developing an annual board report and no single annual report content outline that’ll work for all organizations. Instead, you have to determine what will work for your organization’s needs — and what’s required from a legal and compliance standpoint.

It’s also a good idea to look for good annual report examples, and draw inspiration from those that are particularly unique and compelling. 

Not sure where to start? Here’s a checklist of 5 things every board must consider when it comes time to create the annual report. 

1. Annual Report Audience

Before drafting the annual board report, organizations must take a step back and define who their audience is. In other words, you’ve got to ask yourself “Who will be reading this report?”

The answer will vary. For example, the primary audience for an annual report for a publicly traded company is likely the shareholders. These people have a vested interest in the company’s financial well-being — and the information in the board annual report will help them make investment decisions. 

On the other hand, a nonprofit organization might have several audiences for its annual report. These audiences could include current and potential donors, volunteers, employees, and those served by the organization’s work. 

2. Annual Report Goals

Organizations must determine what they hope to accomplish by producing a board annual report. Goals, similar to audiences, vary widely from one organization to the next.  

For instance, a top goal of an annual report for a publicly traded company is to provide shareholders with the financial information they need to understand the company’s performance. Another goal of publicly traded companies is to meet regulatory requirements. 

The goals of nonprofit annual reports are typically much different. 

A top goal of most nonprofit annual reports is to show how the organization is delivering on its mission and vision. Nonprofits might also use the annual report as a way to thank their existing volunteers and donors and show how their support is making a difference. This builds goodwill with existing volunteers and donors. Another key goal of a nonprofit annual report is to convey the impact of donations, which can help increase financial support from existing and prospective donors.  

3. Industry-Specific Requirements for Annual Reports 

Many organizations — including publicly traded companies — are required to prepare an annual report for shareholders. There are also specific legal requirements for annual reports that vary by state and industry. 

It’s important for boards to understand the annual report requirements for their industry and state — and then ensure their report meets those obligations. 

4. Format of Annual Report

In the past, most organizations designed and printed physical annual report booklets. Some organizations still take this route; however, a growing number are moving away from paper and instead producing digital annual reports. 

There are many benefits to creating a digital annual report. They’re often less expensive, as there are no printing costs. In addition, organizations can incorporate engaging features like video and animation, which isn’t possible with printed reports. What’s more, a digital format allows organizations to more easily track how many people are reading the report — and which sections are getting the most traction. 

Some organizations are going beyond digital PDFs or webpages and using unique formats for their annual reports. For example, GuideStar schedules quarterly “Impact Calls” where they share key accomplishments with stakeholders in real time. 

There are many possible formats for board annual reports. It’s important for the board of directors to determine which format will best accomplish their key goals. 

5. The Role of the Board in Developing the Annual Report

Boards have varying levels of involvement in developing annual reports. It’s important to have a clear understanding of the role your board of directors will play in the process. 

Oftentimes, a board chair includes a written message within the report. This message usually highlights key accomplishments, while also acknowledging the previous year’s challenges. 

Some boards also need to approve the report before it’s released to the public and stakeholders. Gaining the proper approvals can be a time-consuming process. However, a board management portal’s Voting and Approvals feature can help make this process more efficient, while Task Management can streamline any specific responsibilities board members might have in adding content to the report.

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Make this Year’s Annual Board Report Your Best Yet

An annual board report is an important tool many organizations use to share their key accomplishments of the past year — and gain support for the year ahead. Oftentimes, the board of directors plays a key role in creating the annual report. 

Ready to see how the right board portal can simplify and streamline the key tasks associated with developing annual board reports? Start your free trial today

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About The Author

OnBoard Meetings
OnBoard Meetings
At OnBoard, we believe board meetings should be informed, effective, and uncomplicated. That’s why we give boards and leadership teams an elegant solution that simplifies governance. With customers in higher education, nonprofit, health care systems, government, and corporate enterprise business, OnBoard is the leading board management provider.