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Board Evaluations
8 Points to Consider

1. Why do an evaluation?

• To ensure the board of directors provides maximum value to shareholders

• To identify issues that are negatively affecting the board's performance

• To meet current regulations and best practice recommendations

2. What should the evaluation include?

• An assessment of the entire board's performance 

• An assessment of each committee's performance 

• Optional: An assessment of each director's performance. 

Each assessment should be summarized in a separate report that includes insights and recommendations.

3. How should the information be collected?

There are several ways:

• Self-assessment surveys and questionnaires 

• Interviews with board members

• Observations (typically used in long-term assignments)

• A combination of these approaches

4. Who should collect and analyze the information?

The most appropriate approach depends on the needs and resources of the organization and its board.

• The governance committee or the organization's human resources executive

• The organization's attorney

• A specialized consulting firm 

• A large consulting or legal firm 

5. Who should see what?

• All board members should receive a copy of the overall "board performance" report.

• Committee reports can be given to the specific committees, unless the board wants to distribute them more widely. 

• Individual reports are shared only with the individual. 

6. What should be done with the results?

Step one: Present the Board with the findings and recommendations from the evaluation. 

Step two: Discuss the results and how they influence goals for the coming year. 

Step three: Instruct the governance committee to create and implement a plan to address each resulting goal. The governance committee may:

• Set objectives and timelines for board approval and gain commitment from each board member (an essential step)

• Address critical issues

• Address any low performing directors or committee chairs

• Identify different assumptions that board members have about the board's operations

• Resolve conflicts

• Plan board and executive management succession

• Provide feedback of each committee's performance

Individual reports can shed light on how a board member's performance is perceived by other board members and provide a basis for the individual's development.

7. What about cost? 

The cost varies based on the option you select.

Least expensive: the governance committee or the organization's human resource leader develops and administers a survey. However, they may lack the time and/or the expertise necessary to achieve an unbiased evaluation.

Next least expensive: The assessment is handled by a specialized consulting firm, the organization's outside attorney, or a combination of the two. 

Most expensive option: A large consulting or legal firm.

Other factors that affect the price include:

• The number of board members

• Final product desired

• Travel time and expenses

8. What about legal issues?

Conducting evaluations, as recommended: 

• Reflects a board that is innovative, proactive and interested in looking out for the shareholders' benefit.

• Reflects a board that is strongly interested in discovering and taking action on any potential legal issue.

• Demonstrates independence in board processes and board judgment.