Assessing Board Performance
Board Assessments are becoming more commonplace, but are they always effective? When they are, they offer a platform for directors to reinforce board and management roles and to obtain insight into any challenges that might prevent positive forward momentum for the company.
The effectiveness of the process will only be as good as the buy in it receives and the methodology adopted, so it is imperative that the board agrees on clear objectives for the evaluation, who will drive the process and the frequency for the evaluation to occur. Some boards agree to an annual review with ad-hoc reviews happening should the business need arise. Others favour more frequent interventions.
The key to gaining the most from the assessment process is to also involve any senior executives that are non board members, but who can offer insight into performance through their regular interaction with board members. In this way, some of the hidden issues can be highlighted and resolved. Whilst this isn’t always common practice throughout the world it does allow for a broader viewpoint to be included and should be considered.
Companies either use a questionnaire approach and some will engage a third party to interview all participants. It is more common for the entire board to review the outcomes together so that issues raised can be resolved in a transparent way. Imperative is that any negative feedback is unemotionally addressed.
The final key to the process offering positive outcomes is for the board to agree on a set of action points, with delivery time lines to make any agreed essential changes.
Do you have a regular Board Assessment process in place?