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- 29 Ottobre 2024
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It is essential that the board conducts an effective director review that is effective. The process should be clear and timely and also assist the board to understand its strengths and weaknesses, so that it can improve the efficiency of the company.
Assessing the performance of directors individually isn’t easy. The contributions of one director to the board can significantly influence others, especially if the Chair is involved and it’s hard to assess how a specific board compares with other boards. The differences in company lifecycles, strategy and director refreshment policies can make comparisons difficult.
A director board review can take various forms and the manner that a review is conducted will affect how honest the feedback received will be. Some evaluations are informal, like asking other directors for their opinions and others are more structured, with interviews with fellow directors, CEOs, SIDs committee chairs, and the Company Secretary. The review could include observations made by a chairman at board meetings, including the degree of inclusion, the information sharing and the discussion sharing.
It’s usually helpful to have an external facilitator who has experience in conducting these reviews – their neutrality can bring extra accuracy and objectivity to the process. The key is to begin the process by setting the goals of the review and defining the scope. Once this is done, the next step is to formulate an action plan to evaluate the board and gather insight from the various stakeholders. This may involve questionnaire distribution as well as interviews, document reviews and/or the use of software to manage board meetings to facilitate data collection.
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