How to Assess Board Management Effectiveness

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The business environment and stakeholder preferences shift in subtle and dramatic ways. In this dynamic board environment, effective governance is vital to the long-term success of a business. There is no single solution that works for all but the most effective boards have proven methods to evaluate, motivate and increase the effectiveness of board management.

These best practices include an explicit evaluation process, a culture of board development, and digital tools to improve efficiency and transparency. These tools and techniques can help to assess the effectiveness of boards in their role as a fiduciary and trustee of the company, while encouraging collaboration between all directors.

Conducting an assessment requires members of the board to give their time and provide honest feedback. Boards must agree prior to the start on the objectives of the assessment and then set aside time to discuss and agree on these objectives. Boards can utilize a board portal for directors to easily communicate information and ideas and monitor progress towards the objectives.

A board’s structure and composition is a further area of evaluation. This includes the size and composition of the board, the size and composition of the board, the number of established committees and the manner in which and how often these committees meet. Ensure that committees are adequately designed to handle their workload and that the focus of each is future value drivers for the company.

It is also important that the chair is able to facilitate productive discussions and decision-making processes. This includes the chair’s communication and relationship-building skills with the board, other directors, and management. Additionally, the chair should be willing to receive constructive feedback regarding his or her leadership style.