The board looks at itself.

• Author: Van Sinderen, Alfred W.
• Position: Reprint from Directors & Boards, Winter 1985 - Putting In Place the Right Board for the 21st Century

EVERY BOARD needs a way of assessing performance. Otherwise, it carries out its functions year after year without any real measure of effectiveness. The danger of foregoing such an exercise is that a board may be perpetuating ineffective behavior and reinforcing it to the degree that it becomes irreversible.

There are two distinct parts to such a performance appraisal. First, the board must have some understanding of what its role is. And second, it must find a way to measure its performance against that role.

I believe the initial performance appraisal should be conducted by an outside consultant with follow-up self evaluations every three or four years. An independent appraiser has the requisite objectivity to prevent unnecessary stress and to minimize the emotional turmoil that can reasonably be expected to accompany any kind of self appraisal. Once the blueprint for a performance evaluation is laid out, the board can follow those guidelines for future appraisals.

The first step in the process, and probably the most difficult one, is the selection of an outside consultant. Few are truly qualified to perform in this capacity. The average business consultant is not schooled in the dynamics of group behavior.

We were fortunate to have ties with the Yale University School of Organization and Management which, from time to time, has performed studies in a wide range of areas for our company. We found a highly respected academician from the school who had, in fact, conducted board appraisals for other organizations and had done considerable consultation and research for several corporate boards.

We were also fortunate in having, as chairman of the committee on board at' fairs, an individual director who had a great interest in corporate governance, and the role of directors, in a much larger context than just the board of Southern New England Telephone.

The committee met with the consultant and reviewed his suggested process. This was to consist of individual interviews with the directors and selected top managers to identify common themes and issues.

The consultant then circulated a statement of objectives and suggested interview questions to the full board for their comments. At their next regular meeting, the board elected to proceed with the study and process as outlined by the consultant. That outline addressed three fundamental issues:

1. How the board and the board-management relationships are currently functioning.

2. How the board...