After establishing your board-organizing principle, consider four additional success factors.
Also read, “Five Reasons Why You Should Commit to a Board Assessment” by Peter Myers.
As with anything worth doing, board assessments are worth doing well—especially if the board has had an aversion to being “evaluated.” Committing to an assessment process begins with developing a shared understanding of what the board plans to accomplish and a realization that the path to achieving that goal might include a few branches and stones. But, the destination will be worth the trips.
Remember that the board has been in tough conversations before and come out on the other side stronger, more informed and an overall better team. With an assessment though, the journey is specifically designed to help the board get better. That’s not an unintended byproduct; that is the product.
The board can begin the assessment process by developing a charge of commitment-what we call a board-organizing principle or a BOP for short (and because saying BOP is fun and catches people’s attention). A BOP is a declarative statement of how the board will operate as a governing, officiating body over the long term.
Think about the BOP like this. As a board, you’ve had a governing principle already, though it’s likely that it’s just been understood and unspoken. A BOP intentionally informs a board’s actions and engagement to help it achieve new levels of performance. It answers the question of why we (specifically this board) should exist beyond the regulatory reasons.
The BOP should be a compelling statement that calibrates the directors’ attention and actions in a manner that, when put together, evolves the board’s capability in a defined and articulated manner. In other words, the board is a team. If the team wants to chart a course to get better for the benefit of the organization, the BOP sets the stretch expectations.
We recommend assigning a committee to develop an assessment process that furthers the board’s commitment to satisfy its BOP. To prepare that committee, here are select few questions to map out the process:
- What type of assessment will work best for our board? A few that gain the most traction are:
- Board Alignment Assessment—directors quantify critical success factors among best-practice governance categories in aggregate (not peer-to-peer).
- Peer-to-Peer Performance Evaluation—each director ranks each of the other directors and themselves for agreed-upon engagement and contribution factors.
- Technical Skills Assessment—each director contributes to the creation of a benchmark of skills proficiency and then self-assesses; this can include a peer-to-peer component as well.
- Director Dashboard—an analysis of the vital pieces of director information, experience and representation.
- What are the pros and cons of administering this ourselves versus leveraging an outside resource?
- We know of a few credit unions out there that read a blog (like this one) and put together an assessment process, and it has worked out really well for them. More often, we hear of directors who felt like the blind led the blind and the results produced more animosity than alignment.
- Some boards want to hire a firm that does board assessments for a living rather than doing it themselves--especially when directors have avoided anything that even smells like a “board assessment.” Professionals whose job it is to help boards through this process know how to help the board pick and administer the right assessment. More importantly, they know how to help the board gain the most value out of the results.
- What will the CEO’s role be, if any, in the assessment process?
- To really get the conversation going, include the CEO in the assessment process. Boards with an invigorating BOP usually do. Having the CEO participate can be very exciting, but it requires a very explicit commitment from the board—reinforced by the chair, especially—that the intention of the assessment is to identify the new potential for the board to step into. If everyone has rose-colored glasses, the feedback will not identify as much opportunity. It is more helpful when everyone, including the CEO, articulates a more authentic point of view. When done right, having the CEO involved can be positively transformational for the board/management relationship.
- What’s the output going to look like?
- The committee defines the process’s scope. They’ll work up the input, output and timeline. Because there ends up being quite a bit of data, the committee should work through the formatting of the output before the results start coming in.
- Consider these:
- Will the responses be anonymous or confidential? Note that these are different.
- Will it just be averages of the contributing directors? Averages don’t tell the full story compared to showing the response distribution.
- What action will the committee take if not everyone contributes?
- How will the information be displayed?
- Will it be on paper and/or an online interactive dashboard so the data can be sliced and diced to more easily see trends?
How and when are we going to do something with the results?
- The committee should recommend when and where the results will be reviewed.
- Will it be in a separate meeting or attached to the normal board meeting?
- Will results be displayed on a projector, in aggregate or as blinded, individual results, or will they just be individually distributed and never talked about again?
- Will the board chair take a facilitator and administer role?
- Bonus points if the committee recommends a timeline for when the board will do its next assessment so progress can be targeted and measured. That helps directors become more intimate with the accountability aspect of this process.
Boards can design and implement a structure that will uniquely address their development and succession needs. But the methodology needs to extend beyond the tool. It’s how the board uses the tool that matters. We’ve only seen boards become stronger and more mature in their leadership and accountability by institutionalizing a strategic approach that leverages board assessments designed to enhance their impact.
Peter Myers is SVP of CUESolutions provider for board assessments DDJ Myers Ltd., Phoenix. You may also be interested in Myers’ video, What You Should Get Out of a Board Assessment, accessible with CUES Unlimited+ membership. To learn more about how to implement effective board assessment, or if your board wants to improve its critical thinking as part of higher quality governance, reach out to DDJ Myers Ltd. at 800.574.8877.