Doing Board Self-Assessments That Actually Matter
By Dottie Schindlinger
While most organizations conduct annual board self-assessments, it seems that few boards actually use the results of those assessments to develop specific plans for improvement. According to PriceWaterhouseCooper’s 2017 Annual Corporate Directors Survey, board members’ dissatisfaction with their fellow trustees has reached an all-time high. A full 46 percent of surveyed directors said they thought at least one member of the board should be replaced, and 21 percent thought two or more directors should leave the board.
Those findings fly in the face of recent public company governance research and surveys that indicate that the majority of self-assessments rate board performance highly overall, and incumbent directors typically win re-election. Why the contradiction? The blame may lie with a stale, out-of-touch board self-evaluation process.
Too many boards simply update last year’s evaluation questions and email or distribute copies for trustees to complete. Trustees often see the process as a pro forma exercise, which may discourage candid observations and fail to stimulate productive suggestions for improvement from fellow trustees. Trustees also may accentuate the positive to avoid concerns about being overly critical. Consequently, the data gathered may be fundamentally flawed.
By merely reprising last year’s approach and using the same boilerplate questions, the self assessment is unlikely to align with the board’s annual goals and priorities and, therefore, it will not reflect the year’s achievements and challenges. Nor will it raise appropriate questions about the year ahead.