board assessment

5 Ways to Evaluate Board Performance: The Importance of a Board Performance Assessment

Board performance is critical to achieving good governance, operational efficiency and organisational outcomes. As public demands for accountability grow, many boards are expanding their assessment programs. Some are bringing in third-party facilitators.

Performance reporting of boards can be a sensitive matter, with reputations – of board members and the organisation alike – potentially on the line. How can you ensure that your board’s performance assessed appropriately, and any shortcomings dealt with, sensitively and securely?

 

Board performance assessment

Deploying a board assessment tool is a vital step towards effective board performance evaluation. Such tools should integrate seamlessly with your existing board management software and take you well down the ‘Modern Governance’ path.

Modern Governance is where you use a digital platform to securely manage board interactions, including agendas, board papers, minutes, voting, messaging and more.

Here are five tips for evaluating board performance. They can help ensure every member of your board is well-supported and given every opportunity to perform to the fullest extent of their abilities.

Related Article: Inside the Matrix: Board of Directors Skills Assessments

One: Evaluate every board member

Evaluating every board member isn’t just a matter of procedural fairness. It’s a way to ensure that every member feels valued and can contribute fully to the organisation.

The chair must also be evaluated. Chairs often have to make difficult or contentions decisions, and this should be taken into account. Performance against, or progress towards, strategic goals should be the critical metric.

Two: Use questionnaires and interviews

Self-reporting alone won’t deliver good evaluation results. Using a questionnaire to supplement or inform an interview can provide deeper insights. It can prompt specific questions and trigger conversations that reveal a board member’s more in-depth thoughts.

Of course, the goal is to help every board member participate and contribute their expertise to the organisation. Questionnaires and interviews are also an excellent way to identify opportunities for training, new projects and other contributions.

Three: Use third-party facilitators

Third-party facilitators, such as external counsel or specialist board governance advisors, are becoming more popular. They can assist at any point of the process, from designing to executing to evaluating assessment programs and results.

The advantage is that they are independent and should have no ‘baggage’. The disadvantage is that they may lack a deep understanding of the organisation and its goals. In both cases, careful selection and detailed briefing protocols should maximise their effectiveness.

Four: Disclose changes made in response to evaluations

Stakeholders are growing ever-more interested in boards and their deliberations. Regulators, activist shareholders and the non-shareholding public alike expect large organisations to behave ethically and with their social license in mind.

Disclosing how assessments have helped the organisation evolve its thinking and actions will give investors and regulators confidence in the board and its activities.

Five: Make assessment ongoing

This last point is critical. Assessment should be at least an annual process. No board member should be surprised when asked to attend an evaluation session.

Similarly, the organisation must commit to implementing the evaluations’ findings. This might mean providing training or additional resources. Or it may mean changing policies and procedures. The chair should take the lead in driving these improvements.

 

Building strong foundations

An effective board is a strong foundation for long-term performance and value creation. Ongoing performance assessment should be seen as a positive and productive endeavour to maximise every board member’s contribution.

Integrating a suite of evaluation tools into your board management platform will allow you to streamline your processes while respecting every board member’s right to discretion, equity and fairness. There’s simply no better way to improve a board’s performance.

Related Article: Five tips to boost board collaboration

 

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