Performance Evaluation Best Practices for Boards

The beginning process for a board evaluation can be a little daunting even if you’ve participated in them before. Every board should consider itself a work in progress so there’s never really a shortage of areas of board performance to evaluate. Performance evaluation best practice suggests that boards pursue some type of board evaluation every year as a matter of good governance, whether it’s required or not.

It’s pertinent for boards to be on the same page with why they desire to do a board self-evaluation in order for the evaluation to be successful and for the board to be successful as a group. Boards that are invested in the process will gain many valuable benefits from it in the end. The results of board self-evaluations should highlight specific areas where the board can improve its performance. Self-evaluations are also useful for helping boards to identify potential problems or differences of opinion that can be addressed before problems become contentious or get out of control.

One of the biggest myths around board self-evaluations is that they’re tedious and time-consuming. With BoardEffect board management software, they don’t have to be. Take advantage of the advancements in technology by modernizing your board with a board portal system which will save you many hours of time by making board meetings and self-evaluations easier and more efficient.

Take the time to plan out the steps that you’ll need to get your self-evaluations from the beginning to the end. The first step in the process is to identify your objectives.

Identify Your Objectives as a Matter of Performance Evaluation Best Practice

If you get down to the nitty-gritty, most likely, your board has many areas to improve. It may be unrealistic to tackle all of them at once. Place the issue on your agenda and have a discussion about the most important areas where your board can make a difference.

Perhaps your board decides that one of their priorities is to do a better job of preparing for a potential situation that places the board under a spotlight with regard to external scrutiny, legal compliance, or governance standards. Consider some of the ways that improving your board’s performance can add value to your organization. What are the best ways that your board can be proactive about composing a high-performing board of directors?

Note any areas of your discussion where it becomes evident that the board has weaknesses. Consider such areas as increasing board knowledge, improving leadership, enhancing problem-solving skills, becoming more greatly involved in the community, etc.

Clearly identify your objectives so that you can set explicit, specific goals for your evaluation. Determine the scope of your board’s self-evaluation and make some preliminary decisions on an overview of how you will carry out the process.

For example, given the scope of your process, you should be able to figure out how many people you will need to administer the process and who the best people will be to carry it out. In considering the scope of your evaluation, you should also be able to anticipate approximately how much money the board will need to allocate to the process.

If your board’s primary objective is to identify gaps in the board’s skillset, it may be better to forgo the self-evaluation and pursue a skills analysis instead.

Performance Evaluation Best Practice Should Target Who to Evaluate

There are three groups that your board might consider evaluating and the group could vary from year to year. It may be best to evaluate your board as a whole and your committees as well. If your board hasn’t done self-evaluations previously, this is usually a good place to start.

If your board is working on succession planning or board recruitment, it may be a good idea to do individual self-evaluations for each board director including the board chair. Some boards decide its best to do evaluations for key governance personnel including board officers and the CEO. These individuals may be evaluated in conjunction with one of the other types of evaluations.

Pick the most appropriate group based on your group’s objectives.

Your board will also need to consider a few ancillary issues like time constraints and costs of your preferred method to ensure you can carry out your plan as intended.

Determining What to Evaluate and Whom to Ask

At this juncture, you’ll need to begin thinking about the best criteria to use for your board evaluation process. It’s necessary to do this whether your board is seeking general or specific performance improvements. Some resources that you may find valuable are the National Association of Corporate Directors’ Key Agreed Principles or the Business Roundtable Principle of Corporate Governance.

Once you’ve decided what questions need to be asked in keeping with your original objective, you’ll need to identify the groups or individuals who can provide the most honest, insightful answers. In most cases, the board will be the ones giving the answers. To incite richer feedback, consider whether there are insiders such as employees, volunteers, or others who are appropriate to lend insight. People from outside the organization may also have interesting feedback about the board and management. It’s wise to consider anyone who can offer valuable feedback and that may include key stakeholders such as government departments or agencies, major clients, or vendors.

Who Will Conduct Your Evaluation and What Techniques Will They Use?

The board will ultimately decide who will take the lead on the board evaluations. Often, either the board chair or the secretary is responsible for administering the evaluation. Where finances permit, some boards find it helpful to enlist the help of a professional third party to conduct their evaluation.

There are a handful of techniques that boards can use to evaluate the board. Once again, the type of techniques should be driven by the board’s objectives. Boards may decide to do quantitative questions that answer the questions of how much or how many. They may opt for questions that are more qualitative in nature which answer such questions as what, how or why. Most boards find that the best approach is to use both techniques.

A simple questionnaire is often sufficient for board evaluations. With BoardEffect, these can be done electronically which streamlines the process for conducting the surveys as well as analyzing the results. As an added benefit, BoardEffect surveys can be completed confidentially which will provide your board with honest, candid results.

Best Practices for Implementing and Communicating the Results

Once the results are finalized, the board will need to determine what changes they need to make and set up a plan to implement and monitor them. In addition, the board will need to determine who they should share their results with. Generally, boards will communicate their results during a board meeting and may also share them with management personnel.

In conclusion, self-evaluations are important for boards so they can continue to improve upon their performances. Regular evaluations make significant contributions to the board’s group processes. By using a consistent program like BoardEffect’s built-in survey, boards will be able to ensure fidelity throughout the process.