Building effective boards
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.