Board and Director Assessment
Trust, teamwork, integrity, open communication, and individual accountability define successful Boards who embrace methodical, comprehensive evaluations of their own performance and effectiveness. A commitment to a structured system of Board and committee self-assessment is part of the Board’s ongoing continuous performance improvement and becomes a catalyst for needed change. Self-evaluations make good business sense, set the right tone at the top, and can focus the Board more clearly on long-term shareholder value enhancement. Board self-assessment should be considered in the overall context of Board building to improve a Board’s effectiveness and performance. It demonstrates that the Board will hold itself accountable for its performance and has measurable standards. It also sends a strong positive signal to shareholders that the Board is committed to effective governance and Board transparency. The Board takes full ownership of this self-assessment process.
Assessment categories can include any or all of the following: Board review and self-assessment, committee self-assessment, individual Board Director self-assessment, and peer evaluation.
By drawing upon the observations and perspectives of each of the Board members, as well as senior management, we can, together, gauge the general functioning and effectiveness of the Board, its committees and policies. The Board learns what seems to be working best and where there is room for improvement. Personal interviews with each Director and senior executive help bring about agreement on specific actions and practices where changes may make sense. Each assessment and subsequent action plan is customized to fit the Board’s particular needs, challenges, and culture.
The assessment helps ensure that the company’s future Board structure, composition, and practices are aligned with its needs and corporate strategy going forward. This is a highly interactive process. We provide expert counsel from our years of experience working with various Boards and conduct this exercise to help enhance Board contributions and foster improved interaction within the boardroom and with management. This process typically takes a few months to complete and can yield valuable and often unexpected insights.
Process:
- Identify and define the areas and issues of greatest importance to the Board and develop interview protocol, topics, and timeline; discuss with Nominating and Governance Committee, Board Chairman/Lead Director and CEO
- Develop customized interview questions and gain pre-approval by Governance Committee
- Conduct, in person, confidential structured interviews of approximately two hours individually with each Board Director (and senior executive, if requested) to gather in-depth insights about the Board’s performance, composition, structure, processes, and effectiveness
- Observe a Board meeting in progress, if possible and timing permits
- Compile and analyze interview notes, focusing on common themes and ideas, as well as areas where opinions clearly diverged; group into major topic areas
- Provide recommendations, action plans, and best practices/benchmarks, and summarize in a written or oral draft report to the Governance Committee
- Present a formal report to the Board and facilitate Board group discussion in a thoughtful, sensitive, constructive manner with integrity, transparency, and service excellence, to encourage positive Board action and provide a measurable frame of reference and insight into Board and Director performance; this report includes specific points for consideration and action steps for continuous performance improvement for the Board to make a good Board even better
- Evaluate the self-assessment process
Corporate Governance Practice
Board Consulting and Corporate Governance Services
Board Director Recruitment Process