A director's performance appraisal.

• Author: Mueller, Robert K.
• Position: Corporate director

It is no longer presumptive to give boards and their members a performance evaluation. Here is a suggested test of 'boardworthiness.'

Exclusive standards and group anonymity have long masked individual directors' contribution to company performance. But with increasing public concern about corporate behavior, critics are asking, "Are directors boardworthy?"

Until recently, it would have been indelicate, at best presumptive, to suggest that boards and their members should be subject to performance appraisals. But expulsions from boardrooms, revelations of insider dealings, and other unacceptable practices, plus the increased frequency of restructuring followed by lags in certain corporations' performance, have raised the issue of inadequate director effectiveness and performance.

Some attempt to evaluate "boardworthiness" thus seems warranted. It emerges as a natural response to recent events and related issues that provoke several to-the-point questions: What is the role of a corporate director today? Why didn't the directors act? How much of board service is honorary? How much is substantive? Whom does the director represent first -- the public, management, employees, or shareholders? What behavioral norms or codes, if any, steer individual directors, in addition to those set forth in legal doctrines and regulations?

Criteria for membership on corporate boards traditionally have been elusive and purposely ambiguous. Boardworthiness is often assumed to accompany election of a director. And too few boards, board chairmen, and chief executive officers ever really tackle the question of their effectiveness. Considering the aroused public concern over corporate behavior, the tolerance of shareholders and fellow directors to cases of dereliction of duty and pedestrian oversight in the boardroom remains surprisingly high.

But changes in laws and government regulations plus mounting social, consumer, and employee pressures are dousing any lasting flicker of a directorship's honorary nature. We are witnessing an overdue rethinking of the philosophy. concept, structure, composition, role, and effectiveness of the board and the fitness of individual directors.

It isn't easy to objectively self-examine our own effectiveness as a director and to determine whether we have the needed talent, wisdom, experience, inspiration, imagination, independence, and risk attitude. How would you evaluate yourself? Try the following do-it-yourself checkup.

A Director's Boardworthiness Checkup

Under these examination guidelines, the rating of Honors signifies director service of distinction with overall high effectiveness. Pass implies that the director is satisfactory on essentially all counts. Fail means that the director is unacceptably deficient in contributions, performance, or effectiveness.

The do-it-yourself checkup is a suggested thought process. It is not meant to be constraining or overly quantitative. Judgment as to which attributes are essential in order for a director to be effective will vary. This depends on the philosophy, concept, and policies of the board; the value systems of individuals on the board; the nature of the corporate enterprise; and the environment in which the corporation operates.

No two enterprises or boards are alike and, therefore, I can see no way to standardize these categories. This framework is offered only to start you thinking about the importance of personal effectiveness in the boardroom.

Competence as a Director

Honors: * Fits in well and with distinction. Personally competent. Effective presence. Experienced. Influential. Respected. Outstanding peer relationships in profession, business, or community, and with other board members.

* Rounds...