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Good Governance: Board Evaluations
Getting your Board to work together effectively is imperative for the health and growth of any business. And never more so than at the moment when, it is clear that businesses face greater uncertainty due to the recent political upheaval, and face increasing challenges from macroeconomic instability. Strong governance adds value in a turbulent world – providing oversight, control, wisdom, and focus, ensuring that the business has the people, culture, systems and processes it needs to best face these challenges.
Board Evaluations are an invaluable tool for helping your Board become more effective.
An Evaluation enables a Board to reflect on how it is really performing, highlighting potential areas of risk to support early action. For example, ESG is currently a major focus in most organisations, but how effectively is your Board taking ESG into account in its own decision-making, and does it have access to the right data to know how well the organisation is delivering? A Board Evaluation can explore any area of Board activity, from defining organisational culture, to ensuring that the organisation has the strategies it needs or complying with regulatory requirements.
A Board Evaluation also provides the opportunity for the Board to take stock on the diversity, skills and experiences of its own membership to identify gaps or weaknesses and for succession planning. It can also highlight opportunities for new ways of working to help the Board work better together and to make a positive differences to organisational performance and to reap real stakeholder benefits.
Described in the UK Corporate Governance Code as “a powerful and valuable feedback mechanism for improving effectiveness, maximising strengths and highlighting areas for further development” all FTSE 350 companies are expected to have an externally facilitated board evaluation at least every three years, which is a recommendation now adopted as best practice in many sectors.
A successful Board Evaluation demands more than a tick-box exercise. An experienced independent specialist will understand the Board and its members, design a process that reflects their needs, guide them through the process and translate the findings into an agreed action plan and support its implementation. An external independent specialist will add accountability, rigour, credibility, and reassurance to stakeholders, while providing experience and insight from other organisations.
Why work with an external Board Evaluation specialist? Because independence, objectivity and confidentiality are key for an effective evaluation – as well as having a dedicated resource to ensure that there is capacity to actually do it!
What does a Board Evaluation entail? The process should be tailored to your organisation’s Board, its members and their relationship with the management team, and the challenges and context they operate within. A successful Board Evaluation is likely to include questionnaires, interviews with members and other stakeholders, and observations of meetings, and may include a review of meeting agendas and papers. It is imperative that the process is confidential, tactful and diplomatic, so that Board members feel safe and able to provide candid and thoughtful feedback which can be collated and synthesised into conclusions and meaningful recommendations that provide value to the business.
If this would be of interest, reach out to CFPro and one of the newest team members, Victoria Finney. Victoria is a highly experienced and trusted adviser to Boards, Chairs and executive teams. She has worked for over 20 years at the centre of major public service, not for profit and private organisations in company secretary and chief of staff roles. These have included the BBC, Institute of Cancer Research, KPMG and the Chartered Insurance Institute.
With extensive experience of undertaking evaluations in complex organisations, Victoria brings strategic insight and independent thinking as well as the tact, diplomacy and organisational wisdom to deliver an effective and rewarding review for Boards and Committees. Victoria works collaboratively to understand priorities, to recognise achievements and identify areas for improvement, and develop a robust plan for delivering change.