Board Evaluation — an Introduction

It is called by many different names: board review, board assessment, board evaluation, performance evaluation, board appraisal, and board effectiveness…

It is now undertaken in a sometimes bewildering variety of ways, and by multiple providers. Chairmen, senior independent directors, and company secretaries do it. Psychologists and academics do it. Headhunters do it. Even accountants and remuneration consultants do it.

It is approached by a few board members with trepidation, with many by indifference or resignation, and only by some with real enthusiasm.

It is here to stay: as of 2010, with the publication of the new UK Corporate Governance Code, FTSE 350 companies whose primary listing of shares is on the London Stock Exchange must evaluate their own performance with external assistance at least once in every three years.

They must also declare how they have chosen to undertake such an exercise, whom they have used to do it (and if any other relationships exist between the company and that provider), and most choose to give some account of the process and agreed actions for future improvement in their annual report.

Despite the urging of Sir David Walker, there is as yet no voluntary code which governs this area or sets standards and norms. Besides the provisions of section B6 of the Code itself, there is some advice from the Financial Reporting Council, issued in March 2011, called ‘Guidance on Board Effectiveness’. You will find both in the Resources section of this site.

Whether or not you choose to use Condign for your own board’s evaluation, the purpose of this website is to offer a guide to our firm, its philosophy and approach, and its personality.