Preparing a board for the questions a listed company gets
A company heading for listing needed its directors ready for the questions investors, auditors and regulators ask a listed board.
A company was a year from listing. Its directors were experienced in their own businesses, but most had never sat on the board of a listed company.
A listed board is asked different questions: what must be disclosed and when, who approved a related-party deal, and how the company knows its controls work.
What we did
- Step 1
Map the questions
We collected the questions listed-company boards face from investors, auditors, the audit committee and the regulator, grouped under disclosure, related parties, controls and succession.
- Step 2
Check the board against them
We compared the board’s composition, committees and meeting records with what the listing rules expect, and listed the gaps.
- Step 3
Hold practice sessions
Directors answered the hardest questions aloud in two sessions, with a senior reviewer pressing for specifics.
- Step 4
Leave a working calendar
We left a yearly calendar of board and committee business, so the practice carried on after we left.
A board that had already answered the hard questions once.
The directors went into the pre-listing process having already rehearsed answers on disclosure, related-party approvals and internal financial controls.
The gaps found in composition and records were fixed before the first outside review.
A gap list
Committee composition and record gaps were closed before review.
Practised answers
Each director had answered the toughest questions aloud.
A board calendar
The year’s board and committee business was set in advance.
Boards get better at hard questions by practising them in a room where it is safe to get them wrong.
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