It may seem strange to today’s directors but there was once a time when a board meeting evaluation was not a regular occurrence. A Harvard Business Review article from early 1998 lamented on the rarity of performance reviews for boards but warned that institutional investors were beginning to push for issuers to introduce them. More than 20 years later, the annual board evaluation is an essential part of the corporate calendar. Many regulators either mandate companies to perform it – in the case of the Financial Reporting Council (FRC) in the UK and Ireland – or strongly recommend that they do so, as shown by the Bank of Italy’s guidelines.
Unfortunately, whilst most organisations do carry out assessments, some still see them as a compliance exercise that they need to tick off the to-do list, rather than using them to facilitate continuous improvement. This makes little business sense since the prevailing wisdom is that a board that constantly works to make itself more effective and hone its processes provides enormous benefits to the company. This idea is articulated in a 2018 report by the Organisation for Economic Co-operation and Development (OECD) states:
“A well-functioning board provides companies with a clear competitive advantage and can help build connections with government, society and other stakeholders. It assists company leaders in making better decisions and avoiding tunnel vision by providing relevant information on the current state of the business environment in which they operate.”
But should we be looking to evaluate more frequently than on an annual basis?
EVALUATE YOUR BOARD MEETINGS
Annual board evaluations are essential for creating a well-functioning board that isn’t afraid to learn from its past to inform its future strategy. They are an opportunity to take stock of the previous twelve months, drill down on board composition, diversity, dynamics as well as to create action points to improve performance going forward. However, those boards that are seriously committed to growth should also track their progress in between these assessments.
You can barely buy a product or use a service online nowadays without being asked for instant feedback on the process, so why shouldn’t we transpose this culture to the boardroom, too? Instant feedback from board meetings can be a relatively simple process for directors to undertake, but their responses can be invaluable for finessing the workings of the board on a meeting-to-meeting basis and assessing board effectiveness. It can also be extremely helpful when onboarding new board members.
Why wait a year to discover that there is an issue that could benefit the board if fixed when you can spot trends and find ways to enhance your meetings to make them more efficient and effective?
AREAS TO EVALUATE IN BOARD MEETINGS
Evaluating the contents of the meeting agenda helps you work out whether the meeting focused on the most productive areas. You can also ascertain if the board agenda was ordered correctly, with the highest priority items at the start, and if the topics on the agenda were appropriate for the meeting.
If you run out of time to discuss everything, it makes sense to frontload the agenda to make sure you cover the most vital discussion points. If this isn’t happening, you can use this feedback to inform the structure of the next agenda. You might conclude that agendas need to be more concise.
Many boards find themselves bogged down in operational matters during meetings and corporate governance falls to the backburner. Your instant feedback should seek out the opinions of board directors on how relevant the topics under discussion were in terms of governance. This will help you craft the next agenda with more of a laser focus on the proper function of the board.
If directors feel the items were not relevant from a governance perspective, it is up to the chair and the board secretary to either clarify why they were important or endeavour to stay on focus in the future.
The meeting leadership provided by the chair
Hearing honest feedback on your performance can be difficult, but it is necessary to improve in the future. The chair holds such an important role that it is essential they work to their full potential.
Directors should report on how well the board chair maintained the focus on governance, how they handled the discussions, the way they managed timings in the agenda, and how they facilitated and followed up on decisions.
If a chair can hone their performance after every meeting, they will see significant progress that might otherwise not be evident if they waited until the annual assessment.
There are two key questions to ask in order to evaluate director preparation for a board meeting:
Were the board papers adequate and delivered in good time?
How thoroughly did board members read and research them?
Creating an effective board pack is a skill and gaining feedback from directors on what they found useful and what they felt was unnecessary is helpful in enhancing the way you produce board papers in the future. Directors should have all the information they require to understand the topics under discussion and to help inform their voting decisions. The board papers should be simple to understand, with key information pulled out and presented in an easily digestible format. They should also arrive in time for them to be able to understand what is being asked of them.
If a director attends the meeting without an understanding of the issues, this could lead to poor decision-making or to wasted time bringing them up to speed. If one or several directors have not properly prepared, you should take the opportunity to look into the reasons and help them improve for the next meeting.
The tools the board uses
If you use tools like board portals, you should assess how effective they are. Simple tweaks could vastly improve meetings and, therefore, the effectiveness of the board. In addition, how well do projectors, whiteboards, printouts and other meeting elements work and how they could be improved. These may seem insignificant, but anything that improves the meeting experience, however marginal, can help.
How to get instant feedback
The key is to make board evaluations so simple that they take a few minutes for board members to complete. You could use print paper questionnaires every time or you could use software for quick evaluations such as BoardClic Meeting Express. The benefit of using a digital tool is that it quantifies the data and draws insights for you, while also allowing you to compare your current results with historical data.
Boardclic Meeting Express acts as your feedback loop to provide real-time reports on each meeting. It can be used in conjunction with your annual or multiyear board assessments to help you to maintain continuous improvement.
SAMPLE EVALUATION FORM FOR INSTANT FEEDBACK
Here is an example evaluation form to present to each participant as part of a board evaluation following a meeting:
HOW A DIGITAL TOOL CAN HELP
A digital tool provides a more robust way of gathering vital feedback on meetings and presenting it in a visual manner. This makes it simple to convert the data into action points. Here’s what BoardClic Meeting Express can do for you:
Record performance data
Each attendee gives their feedback instantly following the meeting and Meeting Express collates it. The platform also stores the data so that you can track your performance over time and find where you are improving and where you need to put in more work. Having this in one dashboard is more user-friendly than relying on many different paper forms for assessing the board’s performance.
Meeting Express analyses the data it collects on your behalf. You do not need to task someone with pooling the information and creating charts or graphs. This saves time and money for the organisation.
Evaluate specific areas
You can look at broad trends but you can also zoom in on specific areas in order to track your progress. If you have been focusing on one aspect of your governance, you can extract that data and double down on following the trends.
Start with question templates
The tool features industry-specific templates that help you curate the questions you ask board members. This saves you time, allowing you to tailor them and customise them as you go if you wish.
Benchmark against peer performance
Understanding where you are in the marketplace is hugely important. Yes, it is great to see continuous growth within your own organisation, but you also need to know what success looks like in your industry. This enables you to concentrate on the areas that will bring you a competitive edge.
Identify strong/weak points
The data you receive tells you where you are getting it right with regards to leadership and meeting effectiveness. It also points to recommendations of areas that require improvement and the key issues you can work on before the next meeting.
Your board meeting evaluation process will only be enhanced by requesting instant feedback after your meetings with digital assessment tools. Collecting feedback and input on a regular basis guides your efforts to improve between annual evaluations, making it more likely that you will meet your goals and cultivate a culture of continuous improvement.
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