Board Evaluation
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Evaluating your performance
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Tips for selecting an external third party
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The current vogue for independent evaluation of performance means that you will find experts to help you around every corner. Choose carefully and consider:
- Are your goals and scope for the review clear?
- Ask your contacts for their recommendations.
- Is the supplier really independent?
- Question the approach put to you and how it could be adjusted to suit you.
- Ask about their experience in carrying out this work.
- Make sure they understand boardroom life.
- Check they understand your industry and the standards that apply.
- Feel confident that they are discreet and trustworthy.
- What will be delivered at the end of the review?
- Is there any follow up?
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Boards are increasingly considering undertaking a performance review or assessment of board performance. How a board evaluation is undertaken to best deliver value depends on many factors. We concentrate on how to achieve your aims and can do anything from supplying a self-managed online questionnaire or designing a questionnaire that works specifically for you, to a full review with interviews and board observations. Financial Services Board Evaluation requirements are different to those of other Boards, not least of all because of the extra regulatory requirements involved with the FSA and FRC both involved in each firm's standards.
We only work within financial services and regulation. We understand financial services and regulation as our people all have a long financial services industry and regulatory background. As a first step why not call us to discuss the options and what you hope to achieve.
Call Judy Delaforce on +44 (0) 20 3170 5779 or email us today.
How we work
We begin our work by agreeing the objectives you want the review to achieve. Typically these will include matters such as:
- To assess the effectiveness of board (and committee) meetings
- To identify any areas for the board (and/or individuals) to improve their contribution to meetings
- To identify any improvements that could be made in information flows between the board, its members and its committees
We design an approach that will suit your Board and can include:
- Board and Committee observations
- Individual interviews
- Psychometric testing
- Facilitated sessions
- Desk based reviews of information to the board
- Individual Questionnaires (online board questionnaire facility also available)
It has been recommended that the Board should undertake a formal and rigorous evaluation of its performance with external facilitation of the process every second or third year. The statement on this evaluation should then be provided in a separate section of the annual report describing the work of the Board, the nomination or corporate governance committee as appropriate.
In the intervening years the Board may self-evaluate, but what does this mean in practice? This often means informal conversations between the chairman and other directors or a process designed by the chairman and company secretary and administered by both, which can be time consuming and may not be as forthcoming as an evaluation that is entirely independent.
Board Performance Evaluation
For many years Boards were very much self governing. However, in recent years the OECD review, Combined Code (now UK Corporate Governance Code) Walker Review and UK All Party Parliamentary Corporate Governance Group, amongst others have all sought to raise the standards of corporate governance stating that Boards’ performance should be evaluated formally with specific outcomes in mind. Whilst not being prescriptive all of the guidance is clear on the desired outcomes.
According to the UK Corporate Governance Code:
B6 Evaluation
Main Principle
"The board should undertake a formal and rigorous annual evaluation of its performance and that of its committees and individual directors."
Many Boards choose to use some form of external support to alleviate the work-load and maintain a modicum of independence. CTP Global can help you design and manage your Board’s evaluation, provide full external facilitation or help you to ensure that the results are effectively followed-up.
Contact CTP Global now to discuss your requirements... See articles for useful pieces on evaluations, Board effectiveness and governance.
CTP Global – Good Governance: Great Performance
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