Note:The following is intended to be an example that boards should adapt to meet their individual needs.
DESCRIPTION OF THE PROCESS
1. The Chairman of the Board initiates the CEO performance appraisal process by asking the CEO to complete a self-appraisal using these same performance appraisal materials. This will include a summary of achievements relative to the goals and objectives defined at the beginning of the year, and a self appraisal based on the CEO’s key accountabilities.
2. The Chairman then asks each Director (Committee member, if conducted by Committee of the Board) to appraise the CEO’s performance using the performance appraisal materials. In conjunction with this, the Chairman distributes the following documents to each reviewer:
- The CEO’s completed self-appraisal.
- A blank CEO performance appraisal form.
- A report on senior manager’s evaluation of the CEO’s performance over the past year. (Applies to organization’s engaging in 360 degree performance evaluation process)
- The CEO’s proposed goals for the coming year.
3. The Chairman collects the surveys from all reviewers, compiles responses, and averages scores and presents a summary to the Board (Committee) for approval.
4. Directors (Committee members) meet to decide what to emphasize in their feedback to the CEO (and on the final appraisal document). The Board (Committee) also reviews the CEO’s proposed goals for the coming year, makes any modifications necessary, and approves them.
5. The Chairman incorporates modifications requested by the Board (Committee) and prepares final documentation of the appraisal.
6. The Chairman [and ____other members of the Board] meets personally with the CEO to discuss the appraisal results. This session should ideally focus solely on providing feedback to the CEO. If salary increase and/or bonus are communicated in the same meeting, care should be taken to spend plenty of time providing feedback and not let compensation become the principal focus of the conversation.