It is crucial that the board conducts an effective director review. The process should not only be timely and transparent, but it should help the board know what its strengths and weaknesses are in order that it can improve its performance and therefore that of the business.
It is often difficult to assess the performance of directors individually. The chair’s role on the board has a huge impact on other directors. It can be difficult to compare boards due to differences in strategy the company’s cycle, as well as director refreshment policy.
The manner in which a director’s board review is conducted can affect the credibility of the feedback. Some reviews are informal, simply presenting the opinions of other directors. However, others are more structured including interviews with other directors, the SID, CEO and/or committee chairs, and the Company Secretary. The review could include observations made by a chairman during board meetings, for example, the degree of inclusion, the information sharing and the sharing of discussions.
It is often beneficial to employ an experienced facilitator outside to conduct these reviews. Their impartiality can add more rigor and unbiasedness to this process. The key is to begin the process by defining the goals of the review and defining the scope. The next step is to design the plan to evaluate the board and to collect insights from people who are involved. This could include distribution of questionnaires, interviews, document reviews and/or the use of board meeting management software to simplify data collection.