The importance of Board reviews
In any organisation, evaluating employee performance is crucial for growth. For companies with executive boards, this assessment becomes even more vital, given the board’s central role in steering strategic direction and ensuring effective governance. However, unlike traditional performance appraisals, assessing board performance typically requires an external review process to provide an unbiased perspective on navigating complex business environments and competitive markets.
According to a recent study conducted by PwC in 2023, 82% of board directors believe that regular board evaluations are essential for improving board effectiveness and performance. Similarly, a recent report by McKinsey & Company published in 2024 revealed that companies that conduct regular board reviews are more likely to outperform their peers in terms of financial performance and shareholder returns. These findings highlight the growing recognition among organisations of the value that board reviews bring in terms of improving governance, decision-making, and overall organisational performance.
Benefits of Board reviews
Board reviews serve as a benchmarking exercise, comparing the board’s performance against industry best practices. They help identify opportunities for improvement, resolve conflicts, facilitate transitions, realign focus, and enhance board members’ skills.
However, board reviews should not be mere checkbox exercises. The focus and methodology must align with the company’s unique characteristics and objectives.
Tailoring the review process
Engaging an external reviewer who understands the organisation’s goals is crucial. The review process typically includes:
- Understanding the organisation: Reviewers familiarise themselves with priorities and challenges.
- Collecting feedback: Board members provide insights anonymously through confidential questionnaires.
- Conducting interviews: In-depth discussions with individual directors to explore key issues.
- Reporting and recommendations: Findings are compiled into a preliminary report for review and presentation to the board.
- Embedding recommendations: Alignment on recommendations and action planning through facilitated sessions.
Choosing the right reviewer
Selecting an appropriate external reviewer is critical. Key considerations include expertise in assessing business outcomes and boardroom dynamics, ability to garner buy-in from the board, and a clear, adaptable review process.
At The Boardroom Effectiveness Company, we specialise in facilitating comprehensive board reviews tailored to meet the unique needs of organisations across various sectors. For further information or to discuss how a board review could benefit your organisation, please contact us at 01582 463465.
