Evaluating individual board members is important but often overlooked
Most reputable companies want to comply with good corporate governance and hence, among other things, do an annual board evaluation. These national governance codes normally state that the effectiveness of each board member should also be evaluated. However, often boards avoid tackling this part of the evaluation because board members – like everyone else – can feel some insecurity about being personally evaluated. Also, there is uncertainty about how to carry out such a sensitive analysis.
Boards and companies should think about the idea that, to get the best overall board effectiveness, each board member can benefit from becoming aware of how his or her strengths and contributions are perceived by the other board members and executives.
One way to get this information is to conduct individual evaluations simultaneously with the overall board evaluation.
The aim of the individual evaluation is to provide an anonymized overview of how board colleagues, selected executives and other relevant key stakeholders perceive each other’s value contribution and key strengths in a board context. It can be a very simple analysis or more advanced.
The evaluation can revolve around board members’ perception of each individual’s personal style in a board context, based on a number of different aspects, and can include a set of extra questions along with open comments. The setup should be controlled so that the findings are only shared with the individual and the Chair, that no board member can see who said what about him/her, and that only the Chair has access to all individuals reports.
The benefits of adding this type of module to your annual evaluation are that each individual gets a better understanding of how they are perceived to create value to the board, and the board gets a better collective understanding of where it performs well and where it might do better.
Leadership Advisor Group has developed a special version of the individual evaluation as an extra module used in many of our board evaluations. Public discussion about diversity at board level is usually focused only on gender and nationality, but our analysis goes deeper to cover how board members perceive each other’s personal style, areas of expertise, and ability to manage the board role effectively in relation to stakeholders.
With this input, each individual gets the opportunity to see their own strengths and development areas in the context of their colleagues (in an anonymous format) and can measure their own progress over time, if the module is used on an annual or regular basis. Additionally, all respondents see the aggregated average results, i.e., what this board has as a collective strength and what areas it could consider developing further.
We’d be happy to take you through this new evaluation module if your board is interested.
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