LETTER FROM THE CHAIRMAN.
Position | Brief Article |
Evaluations should have consequences
As I WRITE THIS Publisher's Letter, I have just completed another questionnaire soliciting my views regarding the functioning of a board on which I serve. CEO evaluation is now commonplace, but the evaluation of board performance is relatively new. Of my five board memberships, three have recently instituted a board evaluation process, which generally includes a confidential survey and a subsequent board discussion led by either the governance or nominating committee chairman.
The questions and discussions focus on the process of the board and the participation of its members. For example, the questionnaire I just completed asked whether the board receives sufficient financial and competitive information; whether the chairman encourages open debate on important issues; and, whether individual board members are prepared and make a contribution.
In his cover letter, the chairman expressed his "hope that the process would help elicit suggestions for improvement in our corporate governance." Last year's process surfaced some concerns regarding the quantity and quality of the board books and the need for plant visits, but in general the conversation was more form than substance.
Most boards regularly and formally evaluate the performance of the CEO, and surveys of directors indicate that these evaluation processes are effective. In contrast, board evaluation is infrequent, individual director evaluation is seldom, and...
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