Board Evaluations: Rigorous Process or Kabuki Theatre?

On March 15, 2012, Managing Partner Mark Lonergan moderated a panel of three public company board chairmen at the Silicon Valley Chapter of the National Association of Corporate Directors. The purpose of the event was to speak to the issue of public company board evaluations—with a special focus on board assessment and feedback systems.

 

 
Today’s Boards of Directors need to work together effectively on the most important issues impacting shareholder value. Effective performance evaluation of the Board, not just as a group, but also as individual contributors to that group, is a critical piece of governance today.
Mark Lonergan, Founder & Senior Partner, Lonergan Partners

Key Conclusions

After a highly interactive discussion, the panelists and attendees agreed on the following key conclusions.

  • The Chairman/Lead Independent Director plays a key role in the creation of meaningful evaluations

  • Evaluations are only a start. Feedback and improvement systems need to be effective to make evaluations work

  • Board spend too much time on group evaluation – evaluations should also touch on individual board member performance

  • An outside counsel with special skills can be helpful in the administration of board evaluations

  • Special attention should be paid to the CEO’s evaluation of board performance. CEOs are members of the board and have a special understanding of what the company needs from the board to be effective

  • Chairmen/Lead Independent Directors need to spend time measuring board performance against stated objectives

Panelists

Robert T. Clarkson
Symmetricom logo

Robert Clarkson, Chairman, Symmetricom Bob advises public and private companies on a variety of corporate finance and governance matters. His emphasis is on technology and emerging growth companies.

David House
Brocade logo

Dave House, Chairman, Brocade Dave has served Brocade as a director since 2004 and as Chairman since 2005. Earlier, Dave served as Chairman & CEO of Allegro Networks; President of Nortel Networks Corp; Chairman, President, and CEO of Bay Networks; and senior positions at Intel.

Dan McCranie
On Semiconductor logo

Dan McCranie, Chairman, On Semiconductor Currently, Dan also serves as a director for Cypress Semiconductor Corporation and Freescale Semiconductor. Recently, Dan has served as Chairman for Actel, Virage, and Xicor Corporations.