Board Effectiveness Review
There are many factors that influence whether a board is effective: its composition and collective skills, experience and perspectives of the board members; the performance of and relations between individual members; the frequency and format of its meetings and how the agenda is managed; and the quality of the information and support it receives to name just a few. Regular board effectiveness reviews can help the board continuously improve its own performance and, as a consequence, the performance of the organization. While the board needs to lead the process and take responsibility for addressing any areas where there is room for improvement, engaging an independent reviewer can bring greater objectivity and fresh insights to the process.
It is widely regarded as good practice for organizations to undertake externally facilitated board reviews on a regular basis, and in many countries, it is now either mandatory or recommended practice for them to do so (for example, in national corporate governance codes). Typically, the recommendation is that this should be done every three years.
The Morrow Sodali Board & Governance team has extensive experience in conducting externally facilitated reviews and supporting boards to conduct their own reviews across many sectors and many countries. We have also developed a proprietary database of governance information that can enable interested clients to benchmark their board self-evaluation results and board practices against comparable organizations. Our in-depth knowledge of shareholder expectations also enables us to add another dimension to our board reviews by helping boards of listed companies to measure themselves against emerging investor voting trends.
We have the skills and experience necessary to facilitate board reviews effectively, and we have developed a toolkit that can be tailored to meet the specific needs of an organization’s board in consultation with the client. This includes BoardMirror®, our secure and user-friendly online survey tool, that can be set up to provide a cost-efficient mechanism for supporting a board’s own self-evaluation exercise.
We offer two core services:
- Supported Board Self-Evaluation: Structured feedback from board members is obtained and collated from bespoke questionnaires using BoardMirror®. The client receives a report on the effectiveness of the board and each of its committees, based upon consolidated responses and anonymized comments and identifying strengths, areas for improvement and where views diverge.
- Full External Board Evaluation: This adds a layer of analysis to the bespoke questionnaires used in the Supported Board Self-Evaluation. Additional inputs include a review of board documentation, interviews and observing meetings of the board or committee. Combined, these result in an in-depth analysis of the board’s effectiveness, encompassing board competencies, functioning, structure and support, as well as its behavioural traits, and a discussion of the key findings and recommendations with the board in a workshop setting. We also make ourselves available to help with relevant disclosures and the development of an action plan, as needed.
In addition to one-off reviews, Morrow Sodali offers a comprehensive three-year board effectiveness package comprising one full external board evaluation and two supported board self-evaluations. Supporting the board through a three-year cycle means we can help it take stock of how they have implemented recommendations from previous board reviews and consider whether further action is required, as well as provide cost savings.
In addition to supporting boards and committees, Morrow Sodali can also provide support for individual director performance reviews using a range of tools such as self-assessment, questionnaires and 180° peer reviews.
For more information on these services, please contact us: boardgovernance@morrowsodali.com.
ExperienceWe work across multiple industries including banking, insurance, telecoms, technology, oil and gas, mining, power and utilities, construction, media, and consumer goods. This includes large listed multi-national, family-controlled, private equity-controlled, state-controlled and subsidiary companies. We have also conducted board evaluations for significant non-profits, membership organizations, foundations, housing associations, government agencies and public sector organizations.