A board evaluation is a formal assessment of a board’s performance and effectiveness. It focuses on how the board of directors operates and how well it fulfills its roles and responsibilities.
Board evaluations are conducted by gathering information, often from a wide range of sources — from surveys, interviews, and meeting observations to board papers, meeting minutes, and agendas. Boards can conduct self-assessments or work with an external facilitator.
The output is typically a report that summarises the review’s key findings. It will identify the board’s strengths and weaknesses and outline recommendations for improvement. Ultimately, a board evaluation will give a board the information it needs to improve its performance while also ensuring good governance and compliance.
Regulatory requirements and best practices
Regular board evaluations are often a requirement of local company law, corporate governance regulations, and listing rules.
In the UK, France, and Sweden, for example, local corporate governance codes require listed companies to conduct an annual board evaluation and disclose certain details about the evaluation process and outcomes in their annual reports. In the UK and France, listed companies that meet certain criteria are expected to conduct an external evaluation once every three years.
In the US, the NYSE requires the boards of listed companies to perform an annual assessment, but it doesn’t specify a particular method or require detailed disclosure; companies need only disclose that an assessment has taken place. Companies listed on NASQAQ are not required to conduct formal assessments, but many choose to do so to demonstrate their commitment to good governance.
In most regions, it's considered best practice to assess the board, its committees, the chair, and individual directors on a regular basis. Assessments should be structured and objective and look at a wide range of factors such as board composition, diversity, the board’s relationship with management, and decision-making processes.
Types of board evaluation
Board evaluations can take several forms:
- Self-assessments: board members evaluate their own performance through structured surveys or discussions, often facilitated by a digital questionnaire tool.
- Peer reviews: directors share confidential feedback on each other.
- Chair evaluations: reviews focus on the effectiveness of the board chair.
- Committee evaluations: reviews focus on the performance of specific board committees.
- External evaluations: independent experts conduct an objective review of board performance.
- 360-degree reviews: executives and stakeholders are consulted alongside board members.
Combining these approaches can deliver a more comprehensive assessment of board performance, and drive more actionable and impactful recommendations.
The role of data in board evaluations
A data-driven approach to board evaluation enables a more objective assessment of board performance. It helps boards to move beyond subjective opinions and measure their effectiveness in a more scientific way.
This is because data enables you to make comparisons with other organisations and to observe trends over time. This means you can identify patterns and understand your board’s performance relative to its peers.
When the insights and recommendations generated by a board evaluation are specific, rigorous, and evidence-backed, it’s more likely that key stakeholders will engage with them — and that the board will act on them.
A data-driven approach also provides clear evidence to stakeholders, reinforcing transparency, trust, and accountability.
The role of confidentiality and trust in board reviews
Confidentiality and trust are essential for effective board evaluations, because they encourage honest, constructive feedback. When board members feel secure, they are more likely to engage in the process and provide the candid perspectives you need to produce high-quality recommendations.
