Boards hold executives to account for performance. Far fewer hold themselves to the same standard. A serious board evaluation is one of the most effective — and least used — tools of good governance.
Boards spend a great deal of time assessing performance: of the company, of the chief executive, of the strategy. They spend far less time assessing their own. In many companies, board evaluation is either absent or reduced to a short questionnaire completed once a year, discussed briefly and then filed.
This is a missed opportunity. The quality of a board’s work shapes the quality of the company’s most important decisions. A board that never examines how it functions is unlikely to improve, and may not notice when it has stopped adding value.
Why boards avoid evaluation
The reluctance is understandable. Board members are usually experienced, accomplished people who are not used to being assessed. Evaluation can feel like a judgement on individuals rather than a review of the board as a whole. In family businesses and founder-led companies, it can also touch on sensitive relationships and questions of loyalty.
There is also a practical concern: once problems are identified, someone has to act on them. It can feel easier not to ask the question than to deal with the answer.
What a good evaluation examines
A meaningful board evaluation looks beyond procedure. It asks whether the board is doing the work only a board can do, and doing it well.
- Focus. How much of the board’s time is spent on strategy, risk, leadership and capital allocation, compared with operational detail and routine reporting?
- Information. Do directors receive the right information, in the right form, early enough to prepare properly?
- Debate. Are discussions genuinely open? Are dissenting views expressed and heard, or do decisions arrive pre-agreed?
- Composition. Does the board have the skills, experience and independence the company will need over the next five years, not just those it needed when the directors were appointed?
- Relationships. How effective is the relationship between the chair and the chief executive, and between the board and management?
- Leadership. Does the chair lead the board effectively, manage time well and ensure every director contributes?
Methods that produce honest answers
The method determines the quality of what is learned. Questionnaires are useful as a starting point but rarely capture the dynamics that matter most. Confidential, one-to-one interviews with each director — and often with members of the executive team who work closely with the board — produce far richer insight.
Many boards alternate between internal reviews, led by the chair or a committee, and external evaluations every two or three years. An independent evaluator brings objectivity, can raise issues that directors are reluctant to discuss among themselves, and can compare the board’s practices with those of other companies.
Individual contribution
Board evaluation is not only about the collective. At some point, it must also address individual contribution. Is every director adding value? Are some disengaged, conflicted or simply no longer suited to the company’s needs?
These are delicate conversations, usually best handled by the chair in private, informed by the evaluation’s findings. Handled well, they allow directors to adjust their contribution or, when appropriate, to step down with dignity. Avoided, they leave the board weaker for years.
From findings to action
The value of an evaluation lies entirely in what follows. Effective boards translate findings into a small number of concrete actions: changing the structure of meetings, improving board papers, adjusting committee responsibilities, planning succession for specific seats, adding missing expertise or reviewing the relationship with management.
Progress on these actions should be reviewed at the following evaluation. Without this discipline, evaluation becomes a ritual rather than a tool.
Evaluation in private companies
Board evaluation is often associated with listed companies and governance codes, but its value is arguably greater in private, family and investor-backed businesses. Boards in these companies are frequently smaller, less formal and more dependent on personal relationships. They may also carry heavier responsibility, as fewer external checks exist.
For family businesses, evaluation can help separate family dynamics from governance quality. For companies backed by private equity, it can ensure that the board is focused on value creation rather than monitoring alone.
A board that looks at itself
The best boards are not those without weaknesses. They are those that look for their weaknesses deliberately and address them before they matter.
A serious evaluation requires time, candour and the willingness to act on uncomfortable findings. In return, it produces a board that is clearer about its role, more effective in its debates and better prepared for the decisions that will define the company’s future.