The UK Corporate Governance Code requires FTSE350 companies to carry out an externally facilitated board evaluation once every three years. A "formal and rigorous" review of the Board, its directors and committees should occur every year. Public Sector Boards must also carry out an evaluation every year. We carry out Board assessments irrespective of the size or sector of the organization.
What is Board Evaluation? It is an assessment of the way the Board manages the organization's key governance issues. It can be carried out informally by the Chair. An Externally facilitated evaluation primarily entails interviews with Board members, executives and key stakeholders. Where appropriate we also use online questionnaires. We give feedback to the Chair and/or Board and support action planning on the basis of the results. Read More
We have all seen the consequences of poor Board oversight and the impact this can have on organizations, employees and society as a whole, in the 2008 financial crisis as well as other corporate failures.
The key roles of a Board are to:
In large, complex organizations, tracking so many moving parts is a significant challenge. We help the Board identify where they are doing well and not so well, and work with them on an action plan to reach best in class performance.
Our Board Evaluation Model: Our approach combines the Financial Reporting Council Guidance on Board Effectiveness with our expertise in the areas of Leadership, Teams and Decision Making. Read More
The overall model is based on the Financial Reporting Council Guidance on Board Effectiveness. Certain components of our model (e.g. decision making, group dynamics, culture and influence) go beyond this and are based on extensive literature reviews of the organizational psychology literature, covering hundreds of individual studies. The effectiveness of the Board can be broken down to:
1. The effectiveness of significant individuals:
Our review is based on the views of the individuals themselves, fellow Board members and stakeholders.
2. The functioning of the Board itself, as a team, in terms of:
Our review is based on individual board members' views of their own perfomance and their views of the board itself, as an entity. Stakeholders do not have visibility of the internal dynamics of the Board so instead, we ask them about their views of the outcomes of the Board and the organization.
3. The functioning of the Board committees. Our review is based on individual committee members' views of their own performance, that of the chair and of the committee itself. We also solicit feedback from Board members on their views of the outputs of committees in which they do not participate.
Our Approach: We offer in-depth as well as lighter-touch evaluations which can be carried out every three years or more frequently. We are rigorous, commercially experienced and very cost-effective. Read More
Most Board evaluations are self-report. The assumption seems to be that if the Board members rate themselves highly in terms of certain behaviours, governance of the organization can be taken to be effective. This is not necessarily the case.
We assume that effectiveness should also be assessed by stakeholders. We listen to soundings from significant players:
The evaluation will be carried out by experienced, business-oriented occupational psychologists.
Methods used include:
After reviewing findings with the Chair and other Board members, we help to provide action plans to address issues raised or build on strengths. We also provide support and development such as executive coaching.
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Oxford Business Psychology 2020