An effective board evaluation can help gain valuable insight into a company’s operations and improve its quality of service.
It is the process by which a company, business, or organization measures the effectiveness and accountability of board members.
Board governance is also evaluated, keeping in mind aspects such as leadership, management strategy, and general affairs.
Furthermore, board evaluations keep organizations accountable and help provide transparency to their stakeholders by keeping track of strategic plans, performance, and leadership. This ensures that an organization’s leadership is competent and has low levels of internal conflict.
Here are four important categories within which to effectively evaluate your board:
- Board Challenges
Every board faces its unique challenges and situations. It is essential to identify and evaluate which challenges are easy to fix and which ones need to be addressed more thoroughly. One of the common challenges to look out for is the lack of role clarity between the board members and executives. In such a situation, it is vital to have clearly defined roles that are communicated when onboarding a new board member or a new executive.
Other common elements to look at that could present challenges are recruitment and orientation processes, strategic plans, communications strategy, and leadership quality on the board. The quality of leadership should be a key metric in an organization’s board evaluation. This is because the most common challenges are in relation to the quality of leadership from the board and executives.
- Clear Expectations
Without understanding what an organization expects from its board, it is challenging to evaluate it. It is therefore crucial a company to clearly define what it expects from its board. This will allow for clear communication and transparency and avoid future disappointment.
Having clarity with regards to expectations will get the board to align and function with the company’s culture and values. Once general expectations have been established and communicated to the board, identifying critical roles and responsibilities will also make sure all stakeholders are on the same page.
Additionally, setting these expectations from the beginning allows you to henceforth evaluate your board against a set of defined guidelines.
- Realistic Structure and Capacities
Your organization’s structure and capacity depend on the size, on the nature of its business and on its objectives and culture. To understand this aspect of your organization, it is recommended that you have a detailed list of resources that illustrate your organization’s capacity.
As previously mentioned, this will also help you set realistic expectations. The objective is to have an effective structure from the leadership to the management level to allow for a smooth flow of information throughout the organization.
Additionally, it is vital that you revisit this activity at regular intervals or when the need arises, such as during expansion of business, competition analysis or when new leadership or client changes are introduced. As a result, this will also give you a clear understanding of your business growth.
- Objective Leadership
Having a board or leadership team is important. Evaluating their performance is even more critical. The best way to approach this is to evaluate the successes and failures of the board objectively. Giving the board constructive feedback on their performance will motivate them to do more, going forward, and will allow them to learn from any mistakes that may have been made.
Another way to objectively assess their performance is by doing an internal survey. A generic survey on the leadership team will help them understand how they are doing and, more precisely, the impact that their actions and words have. It will help them see their performance from the perspective of the business and its stakeholders, making it more objective and less personal.
By going through the process of putting together board evaluations, you will gain valuable insight into how you can improve your board. This process will need to be evaluated regularly as your business grows but having an effective board evaluation will ultimately improve the quality of the service offer your clients. As a result, this will help boost the business’ overall reputation within the industry.