Monthly Archives: June 2022

Board and committee assessments are a critical part of driving continuous improvement in board performance. A well-executed assessment can help provide real insights into how a board operates and how directors work with one another. It will include both quantitative and qualitative aspects. And it leads to actionable takeaways that can make a real difference.

In our 2021 Annual Corporate Directors Survey, 47% of directors indicated that at least one of their peers should be replaced. Having a robust assessment framework shouldn’t be viewed as a way to get rid of underperformers. Rather, it should be viewed as a means to provide constructive feedback as part of the board’s continuous improvement process. Many directors tend to view assessments in a “check-the-box” manner and believe it’s difficult to be frank. [1]

So what are the leading practices? And, how are boards using assessments to become more efficient, evaluate gaps in board composition and improve their oversight of management?

What is the purpose of the assessment?

From the start, it’s essential for directors to agree on what they want to address in the assessment process. Some of the most common areas of focus include:

• Evaluating board composition. The makeup of the board is critical. Boards need a mix of skills, expertise and experience to effectively oversee the company. Understanding any gaps is the first step to ensuring optimal board composition. Looking at board composition also provides an opportunity to address director underperformance and gives the board a perspective on where they may want to make changes.
• Setting and monitoring board culture. Assessments are a great opportunity to look at board culture and dynamics. Does the culture encourage open discussion and disagreement? Does it promote continuous improvement, open feedback and coaching? Does it promote collaboration and information sharing? Or does it have directors who dominate discussions, closing off other points of view?
• Improving board practices. Boards may also use assessments to analyze the quality and quantity of materials they receive from management, evaluate their governance practices or consider process changes to make going forward. Assessments can be used to determine if boards are using their time during meetings on the right topics and whether their agendas are balanced to include strategic, compliance and tactical topics.
• Planning for board succession. Board assessments can be instrumental in board succession planning—helping to identify what skills and backgrounds will be required based on the company’s long-term strategy. And assessments can encourage boards to move to a more strategic and less reactive approach to board succession. In fact, nearly three-quarters (73%) of directors say conducting a full board or committee assessment is an effective way to promote board refreshment. [2]

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