Your board sits at the heart of your corporate strategy.
It drives long-term decisions as well as immediate reactions to changing circumstances – something in the spotlight recently as the Coronavirus outbreak and uncertainty around Brexit create a rapidly-changing business landscape.
Your board plays a key role in assessing the success of your current approach and identifying remedies where things aren’t working.
But how often is your board itself evaluated? How regularly do you review and critique the way your board of directors works? Should you be doing more?
- What should a board evaluation constitute?
So you decide it’s time to evaluate your board. What sort of areas should this appraisal cover?
Among the things you might review are:
- How you make decisions
- The way meetings are run – are you chairing and running board meetings effectively? Is voting done in line with best practice?
- Whether you have the right mix of skills and experience among your members
- What do you need to fill any gaps you identify – what qualities are you lacking across your board?
- Your individual directors – including reviewing the ability, appetite and time they have to deliver on their board commitments
- Are you meeting diversity targets?
- Your board’s strategic plan – is it sufficient and focused enough to address your priorities?
- Whether information is shared with members in the most effective way
- Any gaps in terms of technology or systems that could support your board
An evaluation can also be a good opportunity to pinpoint and recognise what the board has achieved. At the very top of the organisation, directors can spend significant time assessing and rewarding others’ performance, while neglecting the board’s own achievements. An evaluation provides the chance to rectify this.
Not only this, but a regular board evaluation is recognised as good practice. The UK Corporate Governance Code recommends that boards undertake a formal and rigorous evaluation of their own performance every year. At a time when boards are being told they should do better on governance, this seems like good advice to follow.
- What should you do as a result of your evaluation?
The board’s Chair should take the lead in acting on the findings of your evaluation. The strengths of the board and its members should be recognised, and any weaknesses promptly tackled. New members should be appointed to address any shortcomings in skills and experience.
- Keep a step ahead of the challenges facing your board
Your board is likely to be time-poor, and facing a wealth of competing obligations from both within and outside your business.
But making time for a regular evaluation isn’t just recommended practice, it can be hugely rewarding in terms of re-evaluating your aims, processes, systems and people.
Nothing in this document should be treated as an authoritative statement of the law. Action should not be taken as a result of this document alone. We make no warranty and accept no responsibility for consequences arising from relying on this document.