Board performance evaluation

Introduction

Board performance evaluations are now very common and are often enthusiastically welcomed by board members who see them as an excellent way of taking stock of their board’s governance.

Purpose of board performance evaluation

The purpose of a board performance evaluation is to identify opportunities for the board as a whole and individual board members to improve their governance performance over time. Ideally, evaluation should be against objective, pre-agreed criteria.

Guidance for Crown Entity Boards

Guidance on board self-evaluations for Crown entity boards can be found here. This includes recommended criteria for a self-evaluation, covering eight areas which support good governance of a Crown entity. For boards who would like to use a questionnaire and have not already developed one, here is an example. We recommend tailoring the questions to suit the board.

Discussion topics

Many boards have a yearly or six-monthly review based around a series of discussion topics that are relevant to them. Some relevant topics for boards to discuss are:

• Does the board make good use of its meeting time, ensuring that its focus is on topics that are important and constitute a worthwhile use of the board’s time? (refer to topic ‘Board Meetings’);
• Does the board design its own agenda, preferably on a longer term, annual basis? (Refer to topic ‘Developing the Board Work Plan’);
• Does the board set standards for its own performance and assess itself against those expectations at least annually;
• Are there clear expectations for the performance of the chair? (refer to topic ‘The Role of the Chair’); and
• Is the work done in committees (if any) focused on the board’s governance responsibilities or does this relate more to operational functions? (refer to topic ‘Board Committees’)

(From Getting on Board; Creative New Zealand, p. 80).

Board evaluation examples

Examples of some generic templates are included in the Appendix. As stated above, it is best that these are adapted to ensure they are relevant to the entity’s situation.

Appendix

Web links

• The Office of the Auditor General (OAG) in New Zealand comments on the merits of board evaluations in respect to boards of subsidiaries of local authorities: tinyurl.com/2xaqor
• Governance adviser Carter McNamara has a much-used ‘Board of Directors Self Evaluation’ at: www.managementhelp.org/boards/brd_eval.htm
• Two examples of Stakeholders surveys developed for Sports entities (but easily adaptable by entities as a basis for evaluation) can be downloaded from the Sport NZ site.