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Evaluating effectiveness

How best to evaluate the effectiveness of your board

Category
Building effective boards

Board evaluation

Regular and timely evaluation of performance is critical to the optimal running of an organisation. Just as most employees will undergo an annual performance appraisal, so too should boards regularly review their effectiveness and the skills and experience on which they can draw. A board evaluation assesses a board’s capacity to deliver the long-term objectives of the organisation. It is one way to provide a snapshot of the board members’ individual and collective strengths, highlight areas of weakness, assess how the board functions as a unit, and identify needs for future development. Board evaluation can provide valuable feedback on performance and can help to avoid or resolve common problems such as board members who are contributing insufficiently; a lack of independence and/or diversity; multiple directorships or trusteeships; or a tendency to groupthink.

It is a requirement of the Code for Sports Governance (4.1-4.3) that an internal review, led by the chair – the governance lead may also have an important role to play – is undertaken annually, with an externally conducted review facilitated every four years. The board should agree and put in place a plan to implement the findings of such evaluations.

The exact timing of a review will be for individual organisations to decide. Some may prefer to undertake the exercise towards the end of the financial year to include the results in the annual report and other documents aimed at stakeholders. Other boards may wish to use a quieter time during which they feel more able to be reflective or forward-thinking. This is a conversation which the chair, chief executive and governance professional should have as part of planning the exercise.

An internally-led board evaluation may provide benefit by being undertaken by those with a better understanding of the organisation and the way it operates, greater familiarity with the personalities on the board, and perhaps a clearer insight into the challenges facing each particular sport and the wider sector. On the other hand, an external review offers an independent and objective perspective, the experience of similar exercises in organisations of comparable size or complexity, as well as providing an opportunity for board members to be more open and honest. It can be particularly useful when addressing a known problem which requires tactful, impartial handling. In performing annual internal evaluations and those undertaken externally every four years, organisations can feel more confident that the advantages of each are brought to bear.

Whether facilitated internally or externally, evaluations should explore how effective the board is as a unit, as well as the effectiveness of the contributions made by individual board members. Some areas which may be considered, although they are neither prescriptive nor exhaustive, include:

  • the mix of skills, experience, knowledge and diversity of the board, in the context of the challenges facing the organisation;
  • the clarity of the leadership in attaining the strategic goals and values of the organisation;
  • succession and development plans;
  • how the board works together as a unit and the tone set by the chair and chief executive;
  • key board relationships, particularly the chair/chief executive, chair/vice-chair, chair/ governance professional and board members/senior managers;
  • the effectiveness of individual board members;
  • the effectiveness of board committees and how their work is connected with the main board;
  • the quality of the general information provided on the organisation and its performance;
  • the quality of papers and presentations to the board;
  • the quality of discussions around individual proposals;
  • the process the chair uses to ensure sufficient debate for major decisions or contentious issues;
  • the effectiveness of the governance professional;
  • the clarity of the decision-making process and use of delegated responsibilities and functions;
  • the processes for identifying and reviewing risks; and
  • how the board communicates with, and listens and responds to, members, staff, volunteers, supporters and other stakeholders.

Board evaluation can encompass one or more of the following activities:

  • desktop research of the current governance systems and how effective they are;
  • questionnaires which provide the first cut of information that will feed into any other activities;
  • open face-to-face interviews;
  • board observations;
  • 360-degree feedback within the boardroom;
  • input from senior and middle managers;
  • comparison against peer practices; and
  • skills audits.

Like induction and board development, evaluation should be bespoke in its formulation and delivery – meaning that you and your organisation need to consider what is important for you to evaluate. The chair has overall responsibility for the process and should select an appropriate approach and act on its outcome. The vice-chair is likely to lead the process for evaluating the performance of the chair. Chairs of board committees should be responsible for the evaluation of their committees (it is not necessary under the Code to review committees every year).

SGA says

It is important to remember that evaluations should not be an exercise in ‘proving’ the success, worth or performance of a board or committee. It is ok and completely acceptable to identify that a board/committee has not met an objective and why, whether due to lack of resources, capacity or other issues. Only honest and objective evaluations can help your organisation improve its performance.

The outcome of a board evaluation should be shared with the whole board and fed into the board’s work on capacity building/composition, induction design and development programmes. It may be useful for the organisation to have a review loop to consider how effective the board evaluation process itself has been.

For a variety of tools to assist you in the planning and executing of a board evaluation, check out the links below.

 

Board Evaluation Things To Consider Specimen Board Evaluation Questions Visual Aids For Board Evaluation Board observations - evaluation tool Good practice for undertaking a board review Code of Practice for NFP board reviewers

 

The impact of board evaluations

Once the evaluation is complete, the results should be communicated to the board and any action or follow up taken as required.

Most boards deem evaluations to have a positive impact. In particular, they have been shown to:

  • help surface issues;
  • generally improve board performance, particularly through creating better dynamics and driving individual performance;
  • help improve board processes through improved strategic agendas; allowing more time for discussion and debate; producing better board papers; increased time and frequency of meetings; more interaction between trustees and senior managers and the next management level down;
  • strengthen board cohesion;
  • improve board composition;
  • identify training needs;
  • identify board succession priorities;
  • improve focus and clarity of purpose; and
  • provide a clear action plan derived from the report to the board.

It should be noted that a strong chair and/or governance lead will pick up on things before the review. The process should therefore act as a sense check to the chair. In general, the benefits tend to be seen at the group level rather than the individual level.