When the same people, often using the same approach, conduct the board’s annual evaluations, we know that the process can become rote and new information is unlikely to surface. Further, the typical format and approach often doesn’t lend itself to teasing out subtleties. Bringing in a third party corporate governance consultant to conduct the evaluation changes the dynamic and can offer a different perspective. We are likely to ask questions board members have not been asked before, the responses to which can be very useful. Board members are often more candid with a “trusted stranger” brought in to conduct the evaluation, and in turn the governance consultant can be more candid with the board, and when providing feedback to individual board members. Once any issues are identified, the board and management are then able to make adjustments resulting in improved effectiveness of the board and the individual board members.
Boards and investors have noticed these benefits and we’ve noticed that the demand for a third-party board evaluation is on the increase. The next step is for the board to determine who is best suited to conduct their evaluation – what governance background and experience makes the most sense for a particular board. It is about finding a good “fit” for each board.
Below is an updated version of our popular “What to Look For When Hiring a Governance Consultant to Conduct a Board Evaluation” to help you as you think about having a third party independent corporate governance consultant conduct your board’s evaluation.
|File Size:||136 kb|