Everyone strives for organisational excellence, but we sometimes fail to realise that a board’s governance and performance are intrinsically linked to this.
Shareholders and stakeholders likely expect a lot from your board, as should everyone in the organization, and the best way to ensure peak board performance is by conducting a regular board evaluation. This action also shows everyone concerned that your board is taking continuous improvement seriously.
Satisfying the requirements of a board
Over the years, compounding governance failures have led to increased requirements of boards from regulators. As a result, a board assessing their own performance, including that of individual directors, at least annually has become standard practice. In some cases, regulators require an externally facilitated board review every few years to keep boards compliant.
Governments have similar requirements for various entities as do not-for-profit organisations, all of which have adopted various principles and recommendations even without a legal requirement to do so, purely to ensure the best performance possible from their board.
The many benefits of a regular review
Better boards mean better organisations, and a well-structured benchmarked board appraisal identifies the various areas of strength and improvement with a tried and proven process. This process includes a review of 16 factors that sum up a board’s effectiveness.
When we assess these factors, areas for improvement are quickly identified, and a more detailed analysis can be performed to identify suggestions for rectifying any issues.
After completing a review, your board will have an important baseline from which subsequent improvement endeavours can be gauged. By focussing on the hot spots identified, we’ve seen many examples of boards that improve in those areas and their overall effectiveness.
A proven board review process
Current best practice for a board evaluation is a two or three yearly independent and externally facilitated board appraisal. Subsequent annual internal reviews are also included to focus on improvements that can be achieved in relation to areas identified by the independently facilitated external review.
External reviews are often conducted by a qualified professional like the team at Board Surveys and include the following:
- A validated, benchmarked Board Effectiveness Survey for all Directors, and executives
- A structured interview with each director and executive who completed the survey performed by a specialist to deep-dive into areas that have been rated as the lowest in the Board Effectiveness Survey
- Results of the surveys and the interviews compiled into around three to five areas for improvement with a detailed report that features all findings and recommendations
- A full debrief for the Chair on all results of the benchmarked survey and recommendations included in the report
- A similar debrief to the above but of the whole board
- If required, subsequent workshops or action planning sessions that will assist the board with recommended improvement initiatives
Some form of internal review is also recommended using a slimline survey process. In our experience, the directors and executives who participate in such processes will be more likely to provide candid and objective responses if this is kept anonymous.
Board Survey’s affordable, validated, world-class Board Effectiveness Survey is a benchmarked option that will help you avoid cumbersome internal reviews that are not effective.
The WhatWhoHowDo Framework
The WhatWhoHowDo framework is something that the Board Survey team refined during early 2020 as the outcome of a comprehensive review in collaboration with Deakin University, Melbourne, Australia.
The review confirmed psychometrically defensible dimensions that are beneficial when assessing board function, which, when combined with a review of current board literature, added a more significant focus on organisational culture and integrity, purpose, crisis management, and better uses of the board’s time.
The 16 factors we mentioned above were identified as part of this process as the most important areas for assessing and measuring the effectiveness of a board. This is a crucial part of our process in benchmarking the overall effectiveness of your board.
Ensure you are getting the best out of your board today
Board Surveys’ Board Effectiveness process has a proven track record of success, improving the performance of boards across all organisational types and sizes. Experience the difference for yourself and receive a free extract of a sample benchmarked Board Effectiveness Report today. You’ll be able to see our proprietary framework firsthand and better understand how this can benefit your board and organisation as a whole.
