Board Evaluations: Rigorous Process or Kabuki Theater?

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.

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