Here are examples of modules to consider in an in-depth third party evaluation, which companies should carry out at least every third year
In the current environment of rapid change, boards are asked to play an even more crucial role in steering their companies through turbulent times.
This means that ensuring the right non-executives are at the table and maximizing the board’s effectiveness are key elements in the company’s success. But we all are human, and even non-executives are at risk of not seeing the forest for the trees or letting group think impact their decisions. A board is in many ways a team, so it should be coached like any other team.
Having an objective third-party board evaluation can open everyone’s eyes to potential pitfalls and inspire the board members to evolve from good to great.
So, what elements might a board performance evaluation contain? It depends on the board’s ambition and situation whether the board needs a full-fledged review or just a small follow-up on last year’s board evaluation.
Here are examples of some of our most popular modules, ranging from basic to more advanced, based on our experience carrying out board performance evaluations for various companies in Europe. You can read more about each of these in the PDF linked below.
- Bespoke online questionnaire with anonymous answers. A relevant questionnaire should include general corporate governance questions as well as bespoke questions relating to the specific situations at the board and company level. Leaving plenty of room for anonymous additional comments often turns out to be highly valuable.
- Overview of non-executives’ attendance, dependence vs independence, longevity and over-boarding. Physical attendance matters. It should be tracked and is a premise for providing significant value.
- Individual interviews of each board member. It is crucial to understand each board member’s expertise, how and in what areas the member contributes, what concerns they might have, and what ideas they might have for improvement. The individual interviews are also a perfect occasion to test whether all board members are aligned and can articulate such things as the company strategy and how the CEO is compensated.
- Competence mapping. A fundamental recipe for an effective board is a relevant mix of competencies.
- Competence benchmarking. If you decide to do a competence benchmarking, you will get inspiration regarding how you can work long-term with the board’s succession planning.
- Board meeting observation. It can be useful to get an outside perspective on board dynamics and of how the board meetings are accomplished.
- Time-spent-analysis. This can be an eye-opening exercise, and is something that with little effort can enable the board to revise the structure of the agenda going forward, helping the board make more time for strategic and future-oriented key discussions.
- Board competence – risk – alignment. Comparing the outlined company risks with the factual board competencies is an exercise that is not frequently done, but for obvious reasons an exercise that might turn out to be a critical advantage.
- Culture survey. Identifying the culture at the board level and comparing it with the culture in the executive team and the level reporting to the executive team can reveal in-depth insights regarding cultural differences and where to focus attention to increase motivation and unleash potential.
- Evaluation of diversity of thought. By using a relevant profiling tool, you will be able to identify what kind of personalities you have on the board and what this might mean in terms of preferred work behavior, strengths, and potential pitfalls.
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