When the board conducts its director review it is crucial to conduct it right. The process must be clear and timely, but also help the board understand its strengths and weaknesses, so that it can improve the performance of the company.
The measurement of the performance of directors isn’t always easy. The chair’s role on the board can have a major impact on the other directors. It can be difficult to compare boards due to the differences in strategy as well as company cycles and director refreshment policy.
The manner in which a director’s board review is conducted could affect the credibility of the feedback. Some evaluations are informal, such as asking the directors of other directors to provide their opinions while others are structured, involving interviews with fellow directors, CEOs, SIDs, committee chairs, and the Company Secretary. The review may include observations made by a chairman at board meetings, including the inclusion level as well as the sharing of information and the sharing of discussion.
It is usually beneficial to employ an experienced facilitator from outside to conduct these reviews. Their neutrality can provide additional rigor and objectiveness to the process. The first step is to begin the process by setting the goals for the review and defining the scope. Once that’s done, the next step is to design the plan to evaluate the board and get input from the various stakeholders. This could involve the distribution of questionnaires or interviews, document review and/or utilizing board meeting management software.