The Self-Assessment of Boards is a crucial board function that offers a useful platform to discuss and analyze the strengths and weaknesses of governance. The board can use it to step back and objectively assess its own effectiveness. This will lead to better governance.
A successful board assessment process requires planning time, as well as participation of board members. The first step in determining the scope is to identify the audience for the assessment. This could be the entire board, a particular committee or even individual directors. A good strategy will determine the evaluation method. Common methods include surveys interviews or guided discussions. Once the extent of the evaluation and the methodological approach have been identified then it’s time to develop and distribute questionnaires.
Some boards choose to conduct the test internally or hire an outside consultant. A third-party consultant can help ensure a thorough and objective analysis, which is particularly crucial if your board lacks the time or resources to conduct the evaluation on their own.
While it Corporate Governance is vital for board members’ evaluation themselves, it is equally important for nonprofit boards to look at the group as a whole. It is easy for nonprofit boards and their evaluation facilitators to become absorbed in evaluating individuals’ responses and neglect examining the board in its entirety.
A successful self-assessment is able to help boards clarify expectations, reveal gaps in the composition of the board and align knowledge of the board with organizational strategy, address concerns of investors about turnover and diversity, and increase the effectiveness of board procedures and practices. In their proxy statements, public companies publish the results of their board’s evaluations.