It’s something that my co-founder Monica and I have been talking to clients about for some time now. But I think it took a challenging year like 2020 to jolt directors in many companies into this new way of thinking.
Going forward, it will be the norm. Remember where you read this first.
It’s a development that holds true no matter if your company uses external consultants or a more dynamic, modern survey and data-based platform, such as BoardClic, or a combination.
It also, surprisingly, makes perfect sense.
Which makes me wonder why it hasn’t become the norm before. But since boardrooms are among the most conservative places on the planet, perhaps it should not be surprising that this development has taken time.
Here it is:
Progressive boards now realize that sustained, systematic board evaluations over several years is far superior to carrying out a review of your boardroom every so often with no continuity.
This is no different from any other quality control mechanism in a company. A sustained, long-term approach with rich benchmark data yields far better results than a scheduled quick-fix test every few years. The difference is even more striking in the boardroom than it may be further afield in a company.
The four benefits of sustained board evaluations
- A systematic data-backed approach lets you benchmark progress over time against a universe of companies and your own track record.
- Lets you monitor not only where you stand, but where you are going, which is the real benefit of dynamic processes. That alone can make the difference between generating real insights and value for all stakeholders and just producing a wordy report every few years.
- A continuous process, backed by purpose-built, powerful software will quickly become an integral part of the corporate board schedule and will alert directors to opportunities and challenges as they arise rather than document something everyone knows.
- Finally, there‘s the value of signalling to regulators, investors, employees and other stakeholders that your organization takes corporate governance seriously and uses science-backed tools to do so in a measurable way over time.
We all know that ESG and corporate governance is increasingly top of mind for many investors, and I predict that this scrutiny will only intensify in the coming years. Too many companies treat the board evaluation as a legal necessity to conduct rather than the dynamic navigation tool that it really can be.
Don’t get left behind. It’s time to ditch the idea of a one-time board review that leaves no lasting imprint on strategy, growth and sustainability. Welcome to the age of Multiyear board assessment.