How to convince the board it needs an evaluation

Board evaluations have now become commonplace, however, all too often a board will come to us when a governance crisis has occurred or boardroom tensions are high and it uses a board evaluation as a means to resolve the crisis or alleviate tensions. Regular well-designed performance evaluations, whether internal, external or preferably a mixture of the two, will mean the board avoids such issues, with a review acting as an early warning sign of troubles ahead.

One of the most common difficulties for individual directors wanting to implement regular board reviews is gaining the support of other board members. How do you persuade others that the board needs an evaluation and that regular performance evaluation is important to good governance? Convincing others to adopt performance appraisal is no different from introducing other changes in an organisation.  

As with any change management process, there are steps that can be taken to gain member commitment. 

1. Establishing the need for evaluation

It is important to highlight how particular issues facing the board can be addressed through an evaluation process. In essence, the individual needs to demonstrate how a governance review is a problem-solving mechanism for the board. By linking the benefits of an evaluation and its practical implications for the issues the board faces now, other directors are more likely to become enthusiastic about the process. By framing the experience in a positive light, it is possible to change the board’s view.

An effective board evaluation will improve the working of the board. In particular, the development of the necessary team capacity to perform the roles required. For example, an evaluation may clarify individual and collective responsibilities. As a result, an effective evaluation can help boards attract and retain good directors, as well as build a positive culture in the board. Evaluations contribute to director satisfaction and provide an important basis for self-development for the individuals involved. Board reviews can also contribute to board renewal in a targeted way to distinguish between high and low performance, so that evaluations can feed into the training and development approach of the board.

2. Establishing a sense of urgency

This step is critical to gaining cooperation and action from others. If a performance problem has been identified, it is important to stress to board members that this is a significant issue and urgency is needed. People who understand the problem are much more likely to take steps to address it.

3. Building a coalition of enthusiasts

Individuals trying to persuade their boards to adopt an evaluation process should build a coalition of supporters. While a single person can commence the process, a powerful force is required to sustain the push for change. This may not be necessary if the evaluation proponent is the chair.

It is helpful to have a response for directors who do not value the process. For example, directors who are opposed to board evaluations frequently complain that the evaluation process is time-consuming and does not add value for the time expended. This view underestimates the importance of performance measurement. A well-designed board evaluation requires little time input from directors compared to the other tasks they undertake. Yet the improvement in performance can be large. Ultimately, any attempt to improve board performance will fail without an impartial, well-planned board evaluation process.

4. Getting the timing right

When a particular performance problem arises, a change champion will seize the opportunity to mention improvements that could be achieved through regular evaluation. For example, if a compliance breach has been reported, this may be the time to ask the question, ‘Are we as directors monitoring the organisation appropriately?’ This may lead to discussion of the monitoring function in general, and directors may be able to give examples of other compliance lapses that have come to the board’s attention. By focusing on the function, rather than the  responsibility of  individuals, it may open a discussion and where a performance review may be suggested. When board members are able to see the connection between an evaluation and its role in preventing performance problems, they will be  more likely to agree to regular evaluations.

5. Planning a process

Director’s will be more likely to support an evaluation  if someone has already thought about implementation issues. A change champion should develop an implementation plan on how the board might go about its evaluation.

There are a number of key decisions for boards implementing an evaluation process, so there are seven key questions to consider when planning any board evaluation:

1. What are our objectives?
2. Who will be evaluated?
3. What will be evaluated?
4. Who will be asked?
5. Who will conduct the evaluation?
6. What techniques will be used?
7. What will you do with the results?¹

Having thought about a response to each of these questions, will assist in developing an implementation plan. In relation to question 5, we would recommend considering experienced governance consultants who have assisted many other boards as the most appropriate people to conduct the evaluation process in these circumstances rather than conducting an internally facilitated review.

6. Reinforcing wins

Finally, acknowledging any change in director attitudes by providing positive feedback is likely to build morale and bring more people on board. It is important to recognise and acknowledge small gains to keep supporters motivated and convince others that regular board evaluation is both necessary and beneficial to the board.

The process described above may assist individual directors to convince a doubting board of the benefits of performance evaluation. In every case, the key to success is careful preparation and planning of the process. This encourages support for board evaluations, increases director confidence, can avert a crisis and enables the establishment of meaningful board performance goals. 

¹ Kiel, G., Nicholson, G., Tunny, J. & Beck, J. 2018. Reviewing your board: A guide to board and director evaluation. Sydney: Australian Institute of Company Directors.