Board Evaluation is an important process that helps to assess the performance and effectiveness of an organisation’s boards of directors.
The board evaluation process is essential in determining whether the board is discharging its roles and responsibilities effectively, and whether it is working as an effective team. A well designed evaluation will be comprehensive and will help determine if the systems, structures and processes supporting the board are also effective.
Annual evaluation of the board helps to identify areas for improvement, develop strategies for addressing weaknesses, and ultimately ensuring that the board is continuing to contribute effectively to the future success and growth of the organisation.
The process used for board evaluation will vary depending on the specific needs of the board. However, some common approaches used include self-assessments, peer reviews or assessments conducted by outside consultants. The board may also decide to evaluate individual members of the board, key positions on the board, board committees, or the board as a whole.
When conducting a board evaluation, it is important to identify the key areas that need to be assessed. These areas might include:
- the composition and structure of the board
- individual board member skills, knowledge and training
- diversity of the board
- board decision-making processes
- systems and processes supporting the board
- budgets that support the board
- communication and information-sharing practices
- board recruitment processes
- board reporting expectations and frequency
- subcommittee and other structure that support the board
- the boards understanding and clarity on the organisation’s business model, strategic direction, risks, and strategic challenges,
- the boards leadership and its impact on organisational culture
- the overall effectiveness of the board in guiding the strategic priorities of the organisation
Evaluations should also take into account any challenges or changes that the board has faced in the past or might face in the future.
The overall effectiveness of a board evaluation is determined by a number of factors and there is not always a one size fits all approach. While some organisations might choose to vary their approach each year it is important to try to get base metrics that can clearly show change (positive or negative) in the board over time as this will assist in uncovering if there is improvement, stagnation or decline in the board.
Example Board Evaluation Questions
Below are some example board evaluation questions. These are certainly not comprehensive but are provided to give you an idea of where you could start.
Board Composition and Structure:
Does the board have the appropriate:
- mix of skills, knowledge and experience to discharge its duties effectively?
- diversity in terms of gender, ethnicity, age, and background, to ensure that it represents the interests of all stakeholders?
- Is the board making decisions in a timely and effective manner?
- Is there sufficient discussion and debate among board members?
- Is the board using data and other sources of information to inform its decisions?
- Is the board engaging with stakeholders to understand their perspectives and concerns?
Communication and Information-Sharing Practices:
- Is the board receiving regular and timely reports from management?
- Is the board sharing information in a clear and transparent manner?
- Does the board have a clear understanding of the organisation’s strategic direction, risks, and challenges?
- Is the board able to communicate these effectively to stakeholders?
- Is the board meeting its obligations and responsibilities?
- Is the board contributing to the success of the organisation?
- Is the board providing effective direction and leadership?
Further Board Evaluation Resources
The Path to Effective NFP Board and Director Evaluations
Practical Ways To Improve Boardroom Dynamics
Board Evaluation – Increasing the value-add of directors
How Well Is Your Board Managing its Scarcest Resource?
Difficult Conversations About Director Performance
Streamlining the Work of the Board