Boards Overseeing Key Agents Need Tailored Information
How to get smarter, strategy-focused reporting from third-party managers and operators
Boards don’t lack information—they’re drowning in it. The real challenge is knowing what matters and staying focused on it.
For boards overseeing key third-party agents—like pension funds, investment managers, or JV operators—the stakes are high. These agents play a critical role in executing strategy, managing risk, and delivering on mandates set by the board. Yet, many boards rely on whatever information is provided, instead of defining what they truly need.
A more deliberate approach is needed: clear reporting expectations, designed by the board, aligned with its oversight role.
Why Boards Need a Defined Reporting Framework for Agents
Although a defined reporting framework is helpful for all boards, it is even more important with third party managers due to the nature of their relationship.
There is some element of conflict of interest between an agent and the board (as the client and in some cases their partners).
The board will understand certain stakeholders better than the agent, and be under different pressures and expectations from those stakeholders.
The board may have their own strategies and goals that are not fully consistent with the deliverables of the agent.
Third party agents often have their own board guiding and overseeing their overall strategy and activities.
Third party agents may have other clients that impact the agent’s activities and focus.
Use Reporting Expectations to Stay Focused & Strategic
A well-defined and deliberate reporting framework for key agents will help the board stay focused on their fiduciary, regulatory, and contractual obligations and on the strategic drivers of organizational performance.
When boards actively shape reporting frameworks, they force important governance conversations. These conversations are as important as the reports themselves.
⭐ Board Role – What is our role, and where are we most accountable?
⭐ Decision Points – What key decisions do we need to make?
⭐ Diverging Interests – Where might our interests differ from the agent’s?
⭐ Insight Drivers – What will help us understand performance and make decisions?
⭐ Agent Accountability – What information confirms whether the agent is meeting expectations?
⭐ Report Purpose – What does each report tell us, and why is it useful?
By establishing key categories and reporting rationale aligned with the organization’s specific risk, performance, and strategic decision-making focus areas, the board can increase its own clarity on what reporting it needs.
For example, the board is more likely to include the following in the reporting framework, whereas the agent may not proactively include them in their reports:
🔑 potential conflicts of interest and other topics where the board may be out of alignment with the agent; and
🔑 stakeholder expectations and reputational sensitivities that are understood better by the board than the agent.
A reporting framework can be built that sets out clear reporting expectations over a multi-year calendar that provides guidance to management and agents on what the board needs and why.
It can also reduce unnecessary detail and help the board avoid being drawn into non-critical areas. The natural guardrails of a reporting framework limit entanglement in less important issues that distract attention and waste important board time.
A defined framework also allows the board to monitor on an annual basis whether topics were covered by the agent.
Align Reporting to the Agent’s Role and Oversight Risk
Reporting expectations should reflect the expertise of the agent and the nature of the relationship.
For example, an operator that is a joint venture partner will likely be mostly aligned in interest with other partners. Investment agents may have their own board, auditors, and regulators. The board may receive reports from other third parties that support their oversight of the agent.
In these cases, the board may choose to reduce reporting detail or frequency — focusing instead on areas of strategic concern. This allows the board to use its valuable time wisely, and to more critically assess the materiality of the issue and relevance to its oversight role.
Example: The Investment Reporting Framework
A major pension plan may use an investment reporting framework (IRF) to structure the information it receives from its investment agent. The IRF aligns the investment agent’s reporting with the core areas of the pension plan’s oversight. The IRF categories may include:
1. Investment Strategy – Focused on the board’s understanding and input into long-term investment goals, options and strategies.
2. Performance and Risk Monitoring – Enabling oversight of portfolio results, risk exposure, and alignment with the pension plan’s investment plan.
3. Investment Management Fees – Supporting fee transparency and oversight.
4. Corporate Capability – Assessing the agent’s ability to deliver services effectively.
5. Compliance/Other – Ensuring adherence to legal and investment policy requirements.
By organizing reporting into these categories, the pension plan enhances its ability to assess the coverage and value of each report, streamline redundant content, and focus attention on what truly supports the board’s decision-making.
Show Stakeholders What the Board Sees—and Why
A clear reporting framework also signals to internal and external stakeholders that the board is actively fulfilling its oversight responsibilities. Regulators, plan members, affected communities, etc. often want to understand not just whether a board is receiving information, but how it is engaging with that information to drive good governance outcomes. Providing transparency on the key elements of the reporting framework may help alleviate concerns and address common questions.
Tips for Boards Creating a Reporting Framework
• Start with Purpose: Define why the board needs each category of reporting.
• Map to Responsibilities: Align reports with fiduciary, regulatory, and strategic obligations.
• Prioritize Materiality: Focus on key changes, trends, and exceptions.
• Require Insights: Ensure reports drive decisions and offer meaningful metrics.
• Support Calendar Planning: Use the framework to shape the annual agenda.
• Review Regularly: Update expectations as the organization evolves.
Final Thoughts
Defined and deliberate reporting expectations don’t create more bureaucracy—they sharpen board oversight. When thoughtfully implemented, they help directors govern with clarity, focus, and purpose—even in complex and dynamic organizations.