The benefits of working with an external specialist when doing a board evaluation
What should you expect from an external board evaluation process, and can it really make a difference vs. doing it yourself?
The answer is “valuable insights” and “yes”!
An experienced evaluator can provide priceless insights to the board, helping protect the company brand, sharpen the company strategy, and potentially avoid disasters.
In the article below, we share a few real-life examples of important topics we’ve uncovered while assisting our clients. Putting these insights openly on the discussion table enabled these boards to take the necessary actions, in time. If these issues had been missed, the businesses could have suffered serious damage.
Here are a few examples:
1. In some companies, we found that board members were not articulating the same company strategy. In one case, some said growth was planned through acquisitions, while others said growth would mainly come organically. Moreover, the requirements and the process through which the board should potentially approve an acquisition were unclear. If this misalignment had been left unresolved, it would have been extremely difficult for both the board and the executive management to maneuver.
2. In another case, when probed individually, it turned out that most board members were not convinced about whether a specific business unit still was a good fit for the company. However, everyone thought that they were the only one questioning this, and therefore the issue was not brought to the table until we uncovered it. A year later the business unit was successfully sold, and the money reinvested in the two remaining business units. This enabled the company to significantly accelerate the overall profitable growth.
3. In a third example, when board members were asked individually about the company whistleblower policy, a few board members where not sure if the company had one, while others were confident that the whistleblower arrangement was working well. Few board members were able to put a figure on how many cases the company had during a year, and none were able to benchmark the number toward other relevant companies. We have seen examples of how critical a well-functioning whistleblower arrangement can be, so we advised the board on how to market the whistleblower arrangement better and ensure the board got regular feedback on its activities. The number of identified cases increased by more than 40%. This may have saved the business from significant issues that could have damaged the company if not handled in time.
4. In this fourth example, the board members were extremely happy with the company CEO, but when asked about the CEO succession plan, they acknowledged that the plan was weak. After our evaluation they initiated a program designed to fuel the internal succession development activities, and combined it with hiring an external advisor to do market monitoring of potential external CEOs who could take the job. Three years later the CEO resigned and the transition to a new CEO was smooth and efficient.
An experienced advisor can uncover significant insights that will support the board in going from good to great. This advisor will create a trusting atmosphere where it is safe to disclose sensitive issues and will have proven skills in analyzing the input received, to ensure your board receives rich, qualitative feedback that can make a world of difference.
If you’d like more information on how Leadership Advisor Group conducts external board evaluations, feel free to contact us at email@example.com.