BOARD PERFORMANCE EVALUATION INSIGHTS AND TRENDS

As we welcome in the New Year, we reflected on the insights and trends from last year’s Board Performance Reviews we have conducted.

STAKEHOLDERS

Boards are prioritising oversight of targeted key stakeholder communications and engagement with the aim of improving services and products provided by the organisation in line with its purpose and strategic initiatives. Consolidating the interaction of the Board with key stakeholders with clear objectives and understanding of the role of Directors in these important relationships. Precise, targeted and with a clear objective is the key when it comes to successful stakeholder engagement. It’s not enough for Boards to attend board meetings, as part of their role they should commit to face to face engagement at events where they can informally meet and interact with key stakeholders. This can be challenging for some board members who are busy professionals and may not be physically present in the region they are operating in. 

BOARD & INDIVIDUAL DIRECTOR DEVELOPMENT

Some organisations are moving to implement clearer and more structured Board and Individual development plans. It is not always appropriate to leave director development planning and tracking to individuals which may have been the case in the past. Setting a clear development plan (with a budget allocation) for both Board and Individual with implementation tracked over the course of the year is responsible and contemporary governance. What’s in line of sight for director development? AI, cyber, contemporary governance and financial management. Offering Executives governance training as part of their professional development to deepen their understanding of the role of the Board and to improve communications and reporting also remains popular. 

ORGANISATIONAL CULTURE AND EXECUTIVE LEADERSHIP

There is an expectation among Directors that monitoring organisational culture on a regular basis is as important as monitoring the financial performance. Boards are exploring ways which they can get the right information and touch points to critically assess the culture within the organisation. Executive Leadership is paramount to this with Performance, Development & Succession Planning clearly on the radar for Boards.

SHIFTING THE WORKLOAD TO SUBCOMMITTEES

Boards are shifting some of the increased workload to expand the Terms of References of their sub-committees. Particularly there has been a shift to expand the role of the Remuneration & Nominations Committee to a People & Culture Committee to dive further into Organisational culture and look at key indicators and data with more opportunity to conduct deep dives and provide strategic input into the organisation's workforce strategies.

CLEAR LINES OF SIGHT BETWEEN STRATEGY AND MONITORING OUTCOMES

There is a desire for Boards to move past many of the mundane monthly reports and spend time on strategic discussions and deep dives on priority areas. This includes working on specific and meaningful performance measures in line with strategic outcomes to ensure accountability of management. Sharpening the focus and clarity of board reports to really measure how the organisation is achieving success in implementing key initiatives in line with its purpose and mission is critical. Whilst it can be a difficult task, working with Executive Management for a common alignment on key areas of focus is worth the effort to understand the impact of the organisation in the long term.

Need an external board performance evaluation this year? Get in touch with us to find out more about our 5 step approach to an Independent Board Performance Review.