KPIs for Board Oversight: Metrics That Matter to Directors
Focus board attention on the metrics that drive business health and strategic decisions.
Key Takeaways
- •Less is more: 15-20 KPIs maximum for board-level dashboards
- •Balance financial metrics with leading operational indicators
- •Show trends over time, not just point-in-time snapshots
- •Include benchmarks where available for context
Board members don't need to see every metric your business tracks. They need the metrics that indicate business health, reveal trends, and enable strategic decisions. The art of board KPI selection is choosing what's important while filtering out noise.
This guide covers which KPIs to include in board reporting, how to present them, and common mistakes to avoid.
Core Financial KPIs
Every board needs visibility into financial fundamentals. These metrics should appear in every board package.
Essential Financial Metrics
Revenue
Actual vs. budget vs. prior year; growth rate
Show: Monthly, YTD, trailing 12 months
Gross Margin %
Revenue less direct costs; core profitability indicator
Alert if: Declines more than 200 bps
EBITDA and EBITDA Margin
Operating profitability; actual vs. budget
For PE boards: Track adjusted EBITDA
Cash Position
End of period cash; available credit line
Include: 90-day forward outlook
Net Income / Operating Cash Flow
Bottom line and cash generation
Highlight: Divergence between profit and cash
Working Capital Metrics
DSO (Days Sales Outstanding)
How quickly customers pay
Good: Trending down or stable
Concern: Increasing trend
DPO (Days Payable Outstanding)
How quickly you pay suppliers
Balance: Cash preservation vs. relationships
Cash Conversion Cycle
For product businesses, show the cash conversion cycle (DIO + DSO - DPO) as a single metric that summarizes working capital efficiency. Boards can track one number instead of three.
Operational KPIs
Operational metrics are leading indicators—they predict future financial performance before it shows up in the P&L.
Customer Metrics
- Customer count: Total active customers and net adds/losses
- Customer retention: Churn rate or renewal rate by segment
- Average revenue per customer: Trending up (expansion) or down (compression)
- Customer concentration: Top 10 customers as % of revenue
Sales Metrics
- Pipeline value: Weighted by probability; coverage ratio vs. quota
- Win rate: Deals won / deals closed (won + lost)
- Sales cycle length: Days from opportunity to close
- New bookings: New contract value signed in period
People Metrics
- Headcount: Total and by department; actual vs. plan
- Turnover: Voluntary turnover rate; highlight key departures
- Open positions: Critical roles unfilled and time open
Industry-Specific KPIs
Depending on your business model, certain metrics will be uniquely important.
| Industry | Key Metrics |
|---|---|
| SaaS / Software | ARR, MRR, net revenue retention, CAC payback |
| Manufacturing | Capacity utilization, yield, scrap rate, OEE |
| Professional Services | Utilization rate, average bill rate, realization |
| Distribution | Inventory turns, fill rate, margin per order |
| Healthcare | Patient volume, payer mix, collections rate |
| Construction | Backlog, job margin, % complete billing |
Presenting KPIs Effectively
How you present metrics matters as much as what you present. Follow these principles.
Do This
- • Show 6-12 month trends
- • Include targets/benchmarks
- • Use consistent scales
- • Color-code performance
- • Add brief commentary
- • Group related metrics
Avoid This
- • Single point-in-time only
- • Numbers without context
- • Changing metrics each meeting
- • Too many decimal places
- • Charts without labels
- • Burying key metrics in tables
Dashboard Layout Tips
• Put most important metrics at top-left (where eyes go first)
• Use traffic light colors sparingly—only for clear good/bad
• Separate leading indicators from lagging indicators
• Include one page of financial KPIs, one page of operational
• Keep it to 2-3 pages maximum for the dashboard
Benchmarking
Metrics without context are hard to interpret. Where possible, include benchmarks.
- Internal benchmarks: Budget, prior year, historical average
- Industry benchmarks: Peer group averages from industry reports
- Target benchmarks: Goals set by management and board
Benchmark Caution
Be thoughtful about external benchmarks. Industry averages may not be relevant to your specific situation. Explain why a benchmark is meaningful—or note when your business model makes standard benchmarks less applicable.
Common KPI Mistakes
Avoid these common pitfalls in board KPI reporting.
- Too many metrics: More than 20 dilutes focus; boards can't track everything
- Vanity metrics: Metrics that look good but don't drive business decisions
- Changing definitions: Inconsistent calculations undermine credibility
- No trends: Single-point data hides direction of travel
- Missing context: Numbers without explanation aren't actionable
- Ignoring negative trends: Cherry-picking favorable metrics destroys trust
The Metric Review Cadence
Review your board KPI set annually. Ask: Are these still the metrics that matter? Have strategic priorities shifted? Is anything missing? Are we tracking metrics no one discusses? A good KPI set evolves with the business.
Related Resources
Board Reporting Guide
Complete overview of board communication
Monthly Reporting Package
What leadership needs to see
Need Help Defining Board KPIs?
Eagle Rock CFO helps growing companies establish effective KPI frameworks for board and stakeholder reporting. Let's discuss your metrics.
Schedule a Consultation