Chairs don’t want to waste money, resources and time on a futile exercise. So, they usually have divided opinions when it comes to board evaluations. However, these can be broadly segmented into three kinds. Some chairs (the first kind) consider it as a value-added experience, which can result in positive change for good. And some (the second kind) just want to get it over with by ‘ticking the boxes’ and look at it as just another exercise in compliance. Then there comes (the third kind) who may have had an unpleasant experience with the evaluation and usually consider the process unnecessary and a complete waste of time.

Board performance can drive the company to new heights of success or right into the depths of failure and this is exactly why policies must be set and measures must be taken to ensure that the board, as individuals and as a unit are efficient in fulfilling their responsibilities. After facing the current reality that governance failures are hard to avoid, stakeholders have become often critical of boards and are constantly trying to achieve more accountability and transparency.

 

Since the landscape is constantly changing, it is expected from boards to be adaptable and to maintain the necessary skills to handle any new challenges that come their way. A way of highlighting weaknesses, strengths and bottlenecks to effectiveness, a board evaluation is imperative to add to the continuous effort of improving governance at the top team level.

However, the conventional board evaluation processes have a serious dent that most chairs don’t acknowledge, and this can lead to severe downfall of the company. The pitfalls are usually linked with one or more of these:

Unclear value drivers in the board

The value drivers dictate the kind of evaluation process that should be implemented. If the board fails to identify the core reasons as to why the evaluation in important, it wouldn’t be surprising if the exercise ends up being a waste of money and time.

Considering it a compliance clause

Ticking the boxes to meet the law and completely missing its spirit may satiate the regulators and their rules but it will never go beyond compliance and add value to the organization. This will just leave the chairs, feeling frustrated and maybe even a little confused.

Failing to look behind the scores

The conventional evaluation processes have a tendency to miss focus from the causes to symptoms and this usually happens from over-reliance on non-scientific questionnaires. The boards usually receive a cliché report outlining the answers to various questions, the ones that score high get a pat on the back and the ones to rate lower may have a couple of actions implemented for them. But very rarely do

they correlate the respondent’s answers, consider ranges, non-alignment or the actual issue behind the scores. This may cater to a couple of issues but in the longer run create much serious problems.

Prone to subjectivity

Most conventional evaluations are conducted through self-assessment surveys, these can very quickly get subjective, more on the feelings than actual facts and benchmarks and often this can result in misinformed solutions.

Lack of science and expertise

In the modern technology age of artificial intelligence and machine learning, the conventional processes seem outdated. Using the wrong tool/ platform can create more problems than it ever solves. Few common examples are using an in-house approach, to get rid of the risks and performance pressure or using a general broad survey questionnaire instead of going for a niche, scientific and more focused evaluation around some specific issues.

In this fast moving and competitive era, there is a need for evaluations, which offers real value. It is always best to begin with understanding what’s driving the evaluation, dilute the pitfalls, choose the right tool and finally, take action.

About BoardClic

BoardClic is a digital platform that offers smart, unbiased assessments of Boards of Directors, CEOs and management teams. This enables the platform to provide actionable insights on performance, benchmarking, transparency between teams along with vertical and horizontal alignment of executive functions. Our recommendations draw on numerous years of experience and leading methodology for assessment, which constantly evolves.

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