A 5 Step Approach to Board Performance Evaluation

Sadhana Consulting has a specifically created system for board performance evaluation using five key steps. This is not a tick the box approach but a method to systematically and comprehensively improve and monitor board performance in discharging governance obligations and ensuring continuous improvement. So what are the five steps and how are they carried out?

1. ASSESS

The assessment process involves using a survey which is developed to cover all governance obligations required by a Board which is also tailored to each organisation’s unique purpose, goals and current areas of focus.

The survey uses a data driven approach complemented by the opportunity for further comments and feedback by free form text.

The Chair or other involved Board members/parties are invited to review and make changes to the survey to suit their particular needs and issues of focus. Getting the survey questions right is imperative to ensure the assessment process aligns with the outcomes of the Board performance review.

One-on-one interviews may also be conducted as part of the assessment step, which provides a deeper insight to the review as well as an opportunity to seek further feedback on issues and opportunities.

Who completes the assessment?

Generally, all Board members will assess the performance of the whole Board, the Chair’s performance and an individual self assessment. For a comprehensive review, Board members may be invited to provide individual assessments of Board member’s performance.

The Board may also invite the CEO and other executives who have acute knowledge of the Board operations to evaluate the Board performance.

Board performance evaluation is not about critiquing one another but is an opportunity to reflect, plan and implement improvement initiatives and identify training and development needs.

2. ANALYSE

Once the survey has been completed and interviews conducted the results are then analysed for key themes, issues and opportunities.

The analysis of the results is an integral part of the process as it is used to draw conclusions, identify strengths and review opportunities which will form the basis of the reporting step.

A summarised initial analysis of the results are sent to and discussed with the Chair to provide further context to key themes and areas of focus.

3. REPORT

A presentation, accompanying a comprehensive Board report is provided to the Board detailing the results of the Board Performance Review.

A key component of the report is a summary of the common themes of the assessment, key identified issues and opportunities for improvement.

4. ACTION

The presentation to the Board on the Board Performance Review includes discussions to identify priority improvement initiatives for future planning.

These discussions are then used to formulate a priority action plan to be implemented in the future, usually for the next 12-24 months. Each action is allocated responsible person/group with a timing for completion.

Whilst the report to the Board has suggested opportunities for improvement, what items are included in the Board Action Plan is ultimately decided by the Board based on resources and priorities.

5. IMPROVE

The implementation of the action plan is a key success factor to improving Board performance and it is suggested it is monitored by the Board on a regular basis.

Further Board Performance Reviews can also confirm improvements in key areas over time using comparisons of scores from previous reviews. It is best practice for an external Board Performance Review be conducted at least every 2 to 4 years or when significant changes to the composition of the Board or significant changes in strategic direction of the organisation occur.

The Board Performance Evaluation process is used to continuously improve the governance practices of the organisation giving the group an opportunity to provide constructive feedback to ensure the board work is as effective as it possibly can be for the good of the organisation.

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