Why is a regular assessment of your board important? Well, how else will you ensure quality performance and effectiveness? Board evaluations are often required by stock exchanges and prudential federal, state, and corporate regulations.
There are a number of ways you can conduct your board review; we’ve listed the top best practice board performance evaluation options for 2022, so you can pick the one best suited to your organisation.
Option #1: The fireside chat
We’ll begin with the old fashioned option; the fireside chat. This often occurs between the Chair and directors and is certainly the most informal option. For this reason, this review process is less commonly used in modern setups.
The lack of professionalism in this process is less conducive to the appropriate tone a company will want to set for the rest of the business. If the character and performance of the higher-ups are to be properly assessed, greater rigour and objectivity is often required.
The fireside chat can also be prone to one director influencing the views of another or less candid about individual and collective shortcomings due to the group setting. However, if an informal and relaxed review is what you are after, this is still your best bet!
Option #2: Internally facilitated survey
The internal survey is often run by the Chair or delegated to the company secretary or another director. The survey questions can be tailored to the specific data the organisation would like to understand and completed on paper or via an online survey (preferred).
The facilitator would prepare a data report upon completion of the survey summarising the responses. As the most common option for board assessment, some companies may wish to have their surveys filled out anonymously to ensure candid responses. Some directors may be less forthcoming if they know others directors, and the Chair will access their responses.
Option #3: Externally facilitated survey
A validated, benchmarked board effectiveness survey managed externally can solve the issue of less-candid responses as mentioned above while also saving your organisation preparation time. These survey results, administered by a company like Board Surveys, are provided to the Chair or another nominated party upon completion.
In these situations, the report is benchmarked, which mean hot spots are easily identified. This is another significant advantage of opting for an external over an internal option.
Option #4: Externally facilitated survey coupled with professional advice
Choosing the right firm to offer an externally facilitated survey with quality professional advice is not easy, especially with so many options available.
Board Surveys is one of few firms that offer a validated, world-class, benchmarked board survey suitable for all business sizes. No matter the type of organisation or where you are situated across the globe, we offer a suitable option with in-depth advice based on the results.
You will also have access to additional support to interpret and act on the results. This may include:
- Assistance with director and executive interviews
- Creation of separate reports and executive summaries
- Debriefing the Chair or the board
- Facilitating workshops
- Action planning sessions
- And more
Option #5: Full externally facilitated review
This in-depth option will often include a survey, interviews and a detailed written report of findings and recommendations. Suitable and popular with large listed, private, government and not-for-profit organisations, the full externally facilitated review is often conducted every two or three years.
In these reviews, the following will often take place:
- A validated, benchmarked survey completed by directors and executives
- A comprehensive benchmarked report that includes a Director Effectiveness Module (optional)
- Structured interviews with all directors and selected executives (roughly one hour in duration)
- A written report collating and simplifying the views of interviewees and benchmarked results into the primary issues along with recommendations for improvement
- A debrief of the Chair and the full board on the report along with recommendations
- Ongoing assistance and advice to help ensure the implementation of the recommendations made
- If necessary, board workshops and other facilitated interventions to assist with the above point and improve the board’s performance and effectiveness
In some cases, the full review may also include assessments of:
- Board and committee charters
- Agendas and minutes
- Observation of the board in session (following completion of the main review)
Ensuring best practices for your board review in 2022
Set high standards for your organisation’s performance by setting a high bar when it comes to governance and performance with your board. Validated, world-class, benchmarked board effectiveness surveys are one of the most important assets to ensure you achieve this.
A thorough and objective externally facilitated board survey gives you the data and understanding needed to improve your organisation. Conducting a regular board evaluation exemplifies how seriously your board is about their commitment to continuous improvement. Identify the gaps and potential improvements of your company’s top tiers, and gain insights on how to not only solve them but create more effective processes as you do.