5 Reasons to conduct a board evaluation

5 Reasons To Conduct A Board Evaluation
In this article, you'll find:

Evaluating the board of directors can be rather complicated as the board is the highest strategic body of the company. By conducting a board evaluation, we can identify opportunities to prioritize the most important tasks for the coming period of governance. In this article, we discuss 5 good reasons why you should conduct a board evaluation. 

1. Make the right decisions on the board

A properly conducted board evaluation leads to a solid basis for making correct decisions during board meetings. By evaluating the current situation you will get an idea of which parts of the working procedures should be improved. By periodically evaluating its governance, the board strengthens its position and becomes a brighter guiding light for the strategic development of the company.

2. Improve cooperation within the board 

Evaluating the current state of the board establishes a common understanding of key issues related to the board’s work. If the evaluation is anonymous, more people tend to raise issues that might otherwise be uncomfortable to discuss openly. As a result, cooperation within the board is likely to improve as we reach consensus on important issues.

3. Increase transparency of governance work

Evaluation of board performance provides insight in governance structure for owners, investors and customers. It also increases the credibility of the board. Displaying transparency in governance work is crucial for companies of all sizes. By evaluating the performance of the board, it shows that the company is complying with legal requirements imposed on the board. Furthermore, it indicates that the company’s future prospects are being safeguarded.  

Insightful evaluation for your board

Gain valuable insights into your board’s effectiveness and structure,  tailored to your needs. Track your progress effortlessly and empower your board to achieve its full potential.

4. Recruit the right background and skills for the board

It is no easy task to populate the board with the right individuals who complement each other well. In 2019, Tillväxtverket published a report that clarified the process of populating the board with the right skills. A board evaluation exposes potential gaps in the competence of the board. In addition, it can be used as a basis to decide what type of board members you should recruit. 

5. Track the history of board performance with periodic evaluations

We learn from our history. By periodically evaluating the governance work, it is possible to track progress and identify blind spots that. Research shows that we learn best when we receive feedback on our current performance and we are stimulated by seeing signs of progress. Board evaluation fulfils both and a well-thought-out evaluation should therefore be incorporated into the board’s annual cycle as a matter of urgency.

In conclusion, board evaluation is a powerful tool to improve the efficiency of the board’s work. It is also a method that takes a relatively short time and small resources to implement. Given the significant benefits that can be drawn from the outcome of the evaluation, companies of all sizes should make sure it is conducted properly. Creating a better basis for decision-making, identifying gaps in the composition of the board, and improving cooperation are just some of the many concrete discussion points that the evaluation can result in.

Share This Post
The leading platform for digital evaluations for boards, CEOs, and management teams.