Assessing Board Performance: The secret sauce is in focusing on director strengths and skills.

Author:Dembkowski, Sabine
Position:DIVERSIFIED SEARCH: GOVERNANCE LETTER
 
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The need for high-performing and accountable board leadership is ever-increasing as the complexities of the business environment continue to dramatically change. How can boards keep up and optimally operate in these dynamic and often volatile markets?

Board assessments continue to be a great tool and resource to the board, but they have to go beyond the same old, same old and should be focused on the skills and strengths directors bring to the boardroom.

There are numerous reasons to do a board assessment:

* Some countries require them by law.

* Some boards use them to decide whether a member should be re-elected.

* Some boards use them to identify what characteristics new members need to bring to the table to best complement the existing team.

* In other cases, chairs use them to gain insights into how they can develop and optimize the board.

We believe the best reason for doing a board assessment is to help a board improve its individual and collective performance. To help a board get from good to great.

But there's one thing many directors loathe--how board assessments are conducted. Almost uniformly, they believe that the standard box-ticking exercises about board structures and working processes are not very helpful. And directors are even more critical when widely used psychometric tests such as the Hogan or Myers Briggs evaluations become part of the assessment process. Based on this criticism, we conducted extensive research that led to the identification of the seven hallmarks of effective boards.

The most effective boards do the following when assessing performance, including action items for directors:

Ensure the right composition of the board.

Board composition is probably the area that receives the most attention around the globe, especially with discussions in the media about diversity and the push for women on boards. Many boards focus exclusively on a distinguished background, expertise and a track record of achievements that often produces a board full of "achievers" and "alpha animals."What's often missing is an in-depth analysis of the complementary skills, experiences and behaviors needed to determine a candidate's potential for service to each board.

Action: Develop an interview and selection process that explicitly identifies--and tests--the right criteria of candidates for the board.

Use the strengths of board members.

The awareness of board members' individual strengths, and how they can best use them, varies...

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