Authors Offer Strategies on Conducting Effective Board Assessments

An article by governance experts discusses strategies for achieving effective individual and board assessments. The article cites PwC’s Annual Corporate Director Survey, which finds that 43% of corporate directors say their self-assessment process is very effective and 63% of corporate directors say they find the assessment a “check the box” exercise. The authors note the challenges of getting good feedback from directors and suggest that the biggest roadblocks are: viewing the assessment process as a compliance exercise, using an approach that does not allow for honest feedback and failing to follow-up on the results. The authors recommend re-envisioning the assessment approach and offer five key actions to improve the board’s next annual assessment. They counsel that assessments should seek to enhance board dynamics, composition, oversight and practices, reinforce what is working well and highlight obstacles to strong performance. They write that the assessment is best viewed as an ongoing process rather than just a once-a-year event and suggest increasing opportunities to discuss board effectiveness and instituting a formal process for providing director feedback or coaching throughout the year. The article also highlights the critical role that board leadership plays in ensuring directors receive feedback. The authors write that some companies may choose to engage an independent third party to assess board performance and provide perspectives on how the board compares to its peers.