Non-Profit Board Evaluations and Self-assessments

Non-Profit Board Evaluations and Self-assessments in the UK

Non-profit organisations in the UK perceive vast benefit from board evaluations. These may take the form of an independent evaluation, or a self-assessment.

There is no legal obligation for a non-profit board to evaluate or assess its performance; however, the UK Charity Commission, in its Charity Governance Code, suggests that a ‘strong board’ is one that can demonstrate that it has in place a framework for evaluating Board and trustee performance.

“The best-performing Boards invest resources in their development (time if not financial), regularly reviewing ‘how things are going’ and taking action as necessary,” points out the London-based consultancy, Cass Centre for Charity Effectiveness.

The Centre notes how boards profit from evaluations, as they:

  • Enable the board to identify its strengths/weaknesses and its development needs, e.g., a need for training or for board recruitment;
  • Hold trustees to account for their performance;
  • Help create and maintain a culture of learning and accountability in the organisation by leading by example;
  • Help trustees to develop a shared understanding of good governance performance; and
  • Help the board, and thus, the organisation, to be more effective.

Who Evaluates the Non-Profit Board?

The Charity Governance Code calls for two types of board evaluation: self-assessment and evaluation by an external third party:

“The board reviews its own performance and that of individual trustees, including the chair. This happens every year, with an external evaluation every three years. Such evaluation typically considers the board’s balance of skills, experience and knowledge, its diversity in the widest sense, how the board works together and other factors relevant to its effectiveness.”

“The board must explain how the charity reviews or evaluates the board in the governance statement in the trustees’ annual report,” according to the Code.

Non-Profit Board Self-Assessment

Self-assessment is unquestionably the most powerful tool for non-profit board evaluation. A charity is not like a for-profit business; charities cannot be judged using the usual management criteria of ROI or growth.

Non-profits are, rather, evaluated in terms of impact. Does your charity make a difference? Is it making changes in its target area, or can clear changes in the community around it be seen? “Impact is the difference your non-profit makes: There’s the work you do, and the outcomes that flow from it. Non-profit boards should embrace a culture that supports evaluating in terms of ‘what does success look like?’” explains the Council for Non-Profits.

No one is better placed to evaluate impact than the board of trustees, which has certainly set up the organisation’s mission and written its mission statement. While these statements can be overblown (‘we will seek to feed every hungry child’), the board knows the real scale of the non-profit’s objectives and can evaluate it accordingly. And, when it comes to the evaluation of individual trustees, handling this in-house assures security, as well as tactful management of these sensitive assessments.

To evaluate these objectives, it’s best for the board to make a self-assessment plan, touching on all areas of its operations, and to discuss results at every meeting, as Deloitte notes in a recent report.

“Since the non-profit organisation’s strategic plans are based on assumptions about the organisation’s operating environment and other factors that may change at any time, a growing number of boards take time at each meeting, or every other meeting, to monitor the organisation’s ongoing performance towards achieving its operating objectives,” Deloitte suggests.

The Code recommends this ongoing activity: “As part of this activity, the board should regularly discuss its effectiveness and its ability to work together as a team, including individuals’ motivations and expectations about behaviours. Trustees take time to understand each other’s motivations to build trust within the board and the chair asks for feedback on how to create an environment where trustees can constructively challenge each other.”

But this informal activity should be complemented by an annual formal evaluation. Individual trustee evaluation should, once a year, be the subject of a proper formal survey with comments from all trustees and from management.

Then, the board should evaluate the organisation’s annual plans and the ongoing execution of them, using questionnaires. Boards should ensure that the appropriate resources are being applied to achieve the objectives, that the associated risks are being managed effectively, and that the organisation is making progress towards achieving its annual goals. To do so, the non-profit needs to have implemented well-designed controls and information systems that enable management – and the board – to evaluate operational effectiveness and efficiency, compliance with laws and regulations, and the reliability of management and financial information,” Deloitte explains.

Diligent Board Assessment Tool Enables Comprehensive Reviews at Non-Profit Boards

As part of our Governance Cloud ecosystem, Diligent Board Evaluations helps your non-profit organisation to determine where change is needed on your board, and where impact is not effective in the organisation’s operations.

Diligent Board Evaluations is a convenient alternative to the cumbersome spreadsheets and off-the-shelf surveys that are commonly used in evaluations, making it more cost-effective than hiring outside consultants. Every aspect of its functionality has been informed by Diligent’s experience with non-profit boards worldwide.

Diligent Board Evaluations makes it easy for leaders to contribute their insights and perspectives to board assessments. From anywhere in the world, any time of day or night, they’ll be able to take advantage of key features.

·    Use Any Device – Complete surveys on any devices a director chooses to use: phone, tablet or computer

·    Add References – Use questions that link to additional information and appendices for quick reference and context

·    Ease-of-Use – Eliminate the need for extra training or software with our intuitive features

Diligent Messenger, a secure board communication tool that works as intuitively as a text messaging app, gives users the ability to:

  • Send sensitive messages and attachments within a “closed loop”;
  • Retract messages if needed; and
  • Securely auto-sync groups, contacts and messages across devices.

As organisations grow more complex and regulations more stringent, the scope of governance responsibilities evolves. The Governance Cloud allows boards of directors to meet the demands in the boardroom and beyond with the ability to select the products they need that help them perform their best and work within their allotted budgets.

Diligent is the only Modern Governance Solution

Good corporate governance isn’t just one thing — so why buy board management software that only manages your board documents? At Diligent, we empower leading organisations around the world to turn good governance into a competitive advantage for their business. In the ever-changing landscape of the world, governance hasn’t kept up with the fast pace of business. Quarterly board meetings, paper board books and not using secure communication tools for sensitive data have opened up numerous companies to risk.

Today, threats come fast and furious, from a hacker attack in Belarus to breaking news about boardroom malfeasance. Issues, events and calls for regulation can arise in the blink of an eye. In this environment, opportunities won’t wait. Modern governance tools are built to support leaders in making smarter decisions and becoming faster to function in this new landscape.


Learn how Diligent’s modern governance solution can empower today’s board members and company secretaries to achieve key outcomes. Request a demo today

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