It is vital that the board conducts an effective director review that is effective. Not only should the process be timely and transparent, but it should also assist the board know what its strengths and weaknesses are, so that it can improve its performance, and thus the performance of the company.
It can be difficult to measure the performance of directors individually. One person’s contributions to the board may greatly influence others, especially if the Chair is involved, and it’s difficult to gauge the performance of a particular board with other boards. The differences in the strategy, lifecycles of companies and director refreshment policies make it difficult to draw comparisons.
A director board review could take many forms and the way the review is conducted will influence how honest the feedback received will be. Some evaluations are relatively informal – simply announcing the opinions of other directors, whereas others are more structured such as interviews with fellow directors or the SID the CEO, the committee chairs as well as the Company Secretary. The evaluation could include observations made by the Chairman at board meetings, focusing on aspects like the degree of inclusion, information sharing, and discussion sharing.
It is often advantageous to hire an experienced facilitator outside to conduct these reviews. Their neutrality can provide additional rigor and objectiveness to the process. It is essential to start the process by defining the scope and setting the review’s goals. Once this is done, the next step is to formulate the plan to assess the board and gain insight from the stakeholders. This could mean the distribution of questionnaires or interviews, document review and/or utilizing board meeting management software.
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