Board of Directors Effectiveness
In today’s business environment, corporate Boards are increasingly expected to be more engaged, value-adding, and risk mitigating. It is not enough to focus on compliance and risk mitigation. It is also important to balance governance and oversight with adding value. For pre-IPO companies, it is also very important to build the right Board for the initial public offering and beyond. In addition, annual evaluations have become the norm for Boards in many countries, and many companies conduct an assessment every year. It is a useful way to get input from all of the Board members about how the Board is performing against generally accepted best practices to improve the Board functioning.
Unfortunately, Board evaluations are not always done well. It is important to go beyond a compliance approach to ensure that Board behavior and dynamics are effective. It is also important to ensure that the impact on the CEO and management team is factored in. An effective Board evaluation benefits from having an impartial outsider collect peer feedback and input from management and ensure that there is a supportive and collaborative relationship with management.
With Board evaluations, discretion and sensitivity is important as well as objectivity. We have substantial experience working with Boards and senior management of both Fortune 500 companies and entrepreneurial ventures, and we have substantial experience assessing executives and teams.
We recognize that Board member time is at a premium, so we are targeted in our Board member engagement and adopt a streamlined process that still achieves the objectives.
The benefits to our clients of our Board evaluation and development approach include:
- A Board that adds value and fulfills its governance and compliance role
- Stronger Board alignment about expectations and role
- Better Board and management interface
- More effective Board meetings and better use of Board member time
- More effective committee functioning