For many, that all sounds like a load of self-help nonsense and done badly, it really is a load of self-help nonsense. Let’s consider this. The vast majority of people have the best of intentions when tasked with responsibility and a job to do. They believe and know that their thoughts, decisions and actions have been conducted for the good of the organisation. However, this is only true within their (unintentional but no less significant) limited capacity.
In the last decade, the emergence of entirely new and disruptive business models has exploded and as such the requirements of boards have increased exponentially in areas such as composition, structure and risk, as well as from a more active and demanding investor base. Boards amongst other things aside from setting the direction and a strategy to execute that, are traditionally set up to monitor the performance of management. However, in order for any board (or individual for that matter) to be truly effective, they have to undergo a process of supervising themselves too.
Regular board evaluations – from external providers (eg every three years for FTSE350 companies) are suggested for an accurate outline of the current status of the organization giving the board unique insights to where they are and thus an opportunity to continue with relevant decisions, and to make tweaks and changes where necessary. It has been advised that in the interim 2 years, boards should continue to conduct board evaluations but as an internal exercise.
- ascertain where the organization really is at the moment – a snapshot review what is going well and less so.After all, it can be very easy to unintentionally veer off course
- to ensure that they continue to perform to the highest of standards
- help make thoughtful and significant decisions at key points and milestones eg change in strategy, composition, appointment of a new Chair or CEO etc
In a fantastic article by Egon Zehnder, they talk about board effectiveness being demonstrated by 2 key aspects:
- Processes, including agenda setting, board leadership structure and committee operations
- Behaviours, including competency gaps, quality of discussion and alignment with stakeholders
However, the key point that they make is that most organisations and evaluations tend to focus on the former without further exploring the latter – behaviour. They would argue that it is normal, after all that is a necessary and tangible part of the work. However, where we would strongly agree with them is that performance is a lot more than just box ticking. It’s the ‘softer’ aspects, that allow us as evaluators and organisations far more instructive insights. These include but are not limited to how board members interact with and communicate with each other, how they manage debate, how they perceive feedback or risk etc. In short, if the dynamic does not work effectively (which is not to say, they all agree with the Chair), then we have a problem.
As a seasoned executive coach and organisational psychologist, I have worked with several C-Suite executives, all the way to middle managers and high performers within organisations. All are perceived as talented and valuable assets. Our objectives can very much vary but in common to all, is the improvement of self-awareness, self-reflection and how to use those learnings to bring about effective performance and change. Without these vital insights and learning, progress is virtually impossible. This is no different for leadership teams and boards.
To do so, independent evaluations a necessary tool to provoke that self-awareness and self-reflection which leads to more powerful outcomes and outputs. Independent accountants and lawyers are called in for their advice, it would be no different for board evaluators, at least at a minimum of every 3 years. Some boards self-evaluate with regular reviews, conversations and processes and in many ways, those are effective and useful for the interim to the 3 years. However, boards like individuals, have blindspots and this is where independent evaluators can help shed some light. Additionally, if the dynamic between members could be healthier, or even worse, is toxic, these internal reviews are almost definitely not going to be able to shed light on that toxicity. Defensive individuals and teams tend to ultimately lead to stagnance, complacency and far worse, bad decisions based on self-interest. Only an independent will be able to highlight these concerns.
Additionally, the recommendations that will arise from evaluations will again be given for objective purposes to serve the organisation, as opposed to (often unconscious) decisions made because of particular board dynamics, again focused on ego and self-interest.
Board evaluations are not there to punish or harm the board nor its members. Their objective is to help them be and do better. For most, the insights found from the process and from the report have proven to be informative, insightful and positively contributive to the success of the board and therefore the organisation. By having candid, thoughtful and informed conversations, and through careful and professional observers, the evaluators can often help expose unknowns and unintended behaviours that may actively be impacting the board’s performance. Discovery and identification of these challenges, some of them, seemingly insignificant, can really help propel boards forward, leading to better governance, improved board dynamics and a better sense of vision and purpose.
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