Unlocking Board Excellence: Elevating the Performance Evaluation Process

Pearl Meyer shared tips for improving the effectiveness of board performance evaluations in a recent report featured by NACD. The article describes a useful assessment process and offers key questions for meaningful discussions around board dynamics and culture.

Why it matters. Board directors’ oversight responsibilities have expanded in recent years and the heightened scrutiny of public companies has led to increased importance of having a high-performing board who can successfully mitigate risks and navigate critical issues.

5 Key Elements of the Evaluation Approach

• Comprehensive assessment around committee and board structure, governance processes, leadership, interaction with management, succession planning, director knowledge and preparation and performance of specific issues the company faces.
  
  
• Interview-driven. While a survey can be helpful in discerning some information, one-on-one dialogue is much more useful in uncovering qualitative issues, cultural considerations, context  and nuance.
  
  
• Third-party facilitator. An independent and skilled assessor can foster candid conversations and ask probing questions to frame findings more accurately.
  
  
• Action-oriented. Information gleaned from the evaluation should also contain an action plan that identifies specific areas for improvement.
  
  
• Candid and transparent. Assessments should be shared with the full board, preferably by the third-party facilitator.

Pearl Meyer notes that it may not be necessary to conduct the full evaluation process each year, but the regular cadence should be determined. In off-cycle years, where a survey is the primary tool, including open-ended questions that can offer key insights should be included.

Helpful committee-specific sample questions are included, such as:

• How are we integrating oversight of our nontraditional responsibilities?
• How well are we interacting / coordinating with committees on overlapping responsibilities?
• Do our agendas reflect careful prioritization of emerging issues, while maintaining our core responsibilities?