Most professional people strive to be good at what they do. Humans derive satisfaction from doing a great job. At the practical level, if the goods or services we create are well done, then we have customers.
In the workplace, there has arisen a huge industry focused on getting the best out of human capital. We recruit with care, set objectives, performance manage, mentor, train and develop our people. And yes, every so often someone has to be moved off the bus. All of this we accept as employers and employees.
When good practice stops at the boardroom door
It is odd, then, that this does not always translate to boards. There is, in many cases, a sense that, once we have made it to the boardroom, all these things that were commonplace no longer apply. Absolutely, there are great boards who strive to be learning entities, truly open to continual improvement. We love working with them. But there are still too many that, for whatever reasons, are not open to the possibility that all may not be perfect and able to be improved.
What the data says
In the USA in 2022, just 52% of companies in the S&P 500 disclosed that they conducted a combination of full board, committee, and individual director evaluations, but laudably up from only 37% in 2018.
A Global Network of Directors Institutes’ report found that over 50% of directors consider board evaluations critical for improvement, and 30% plan to upgrade their evaluation. However, in a related conference forum it transpired that half of the boards represented had never had an external review.
This article is prompted in part by some recent experiences and in part by a post on Paul Smith’s Future Directors Hub. He listed results of a simple LinkedIn poll exploring why boards tend to avoid self-reflection. The responses were:
- We don’t see much value — 8%
- It costs too much — 2%
- We’re already doing well — 14%
- It could be uncomfortable — 76%
Paul went on to comment on the obvious statistic related to a lack of comfort: “that boards are that scared to look at their own performance is shocking, not cost, not value, not existing good performance, but the possibility that holding a mirror up to themselves would cause discomfort”.
Why boards resist review
Why would a group of talented people suddenly become resistant to reflection and development?
There are a number of possible answers.
Experience of the past: Poorly done evaluations can be, at best, a waste of everyone’s time or, worse, actually damaging to board cohesion. In our view this includes facile self-assessments that lack rigour. Also, compliance exercises forced on organisations by owners or monitoring agencies. Go through the hoops, tick the boxes, generally resulting in nothing to be seen here, let’s move on. Dispiriting for everyone.
Board at war: We agree that if the board has serious internal conflict this needs to be resolved first. Usually that requires expert external assistance to discern cause and help drive change.
FIGJAM: Fabulous acronym that came to prominence during Lord of the Rings filming. But applicable. There are boards, and directors, who believe they are displaying state-of-the-art governance, so no need to look further. We usually find a gap between assertion and reality in these cases.
The delicate ego: Suddenly people who have successfully navigated a tough world become delicate flowers and don’t want any feedback, positive or otherwise. They certainly don’t want to admit to their colleagues, or for the outside world to know, that they may still have some learning to do as a director. Especially resistant to the idea of peer-based individual evaluations.
Controlling chair: This is possibly the biggest issue. If the chair is not on board with and championing a review, then time is being wasted. They are often shocked that directors have divergent views or that the board is not functioning as the well-tuned unit they imagined. They certainly don’t want owners or monitoring agencies to know that.
Confidentiality concerns: Valid but easily addressed.
Cost: Always surprised about this one. With reference to the earlier comment on the HR industry, why would a board, the organisation’s peak body, want to scrimp on its own development?
The wrong people, with the wrong mindset: Any organisation looking into a complex future must have a learning disposition. Even more so at the board level. Inquiring minds, open to new ideas and willing to change. Absolutely essential.
Ask management
Brave boards widen their review to include the views of management. A separate but aligned process. And with good cause.
PwC’s 2025 board effectiveness report surveyed 520 C-suite executives of public companies and found that only:
- 35% of executives rate their board’s overall effectiveness as excellent or good.
- 32% think their boards have the right expertise.
- 50% have confidence in their boards’ ability to remove underperforming directors.
And that:
- 93% say one director should be replaced.
- 78% say two or more need to go.
While it is arguable that senior executives may need further understanding of the role of the board, these are nonetheless sobering numbers. Too often management is struggling to discern the value being added by the board and the payback for the time involved. Be brave, ask for some honesty.
Shifting the dial
Evaluations landing on boards that are not prepared for them will be of limited utility.
Expectations: At recruitment, make clear that assessment at the group and individual level are integral to the role. Outline this in position descriptions and the letter of engagement. In the board charter, under governance processes, make clear that the board works with a learning disposition, an inquiring mind together with a desire to develop and be accountable for its performance.
What don’t we know? Bake learning into the board’s work. What do we need to know more about? What are the four key issues that will impact performance?
Start small. Take ten minutes to reflect at the end of each meeting. A different director each meeting (not the chair) observes the meeting and leads a brief conversation. Focus areas can usefully include: Did we cover everything today we needed to? Did management get what they needed out of the meeting? Are our decisions clear? Did we add value? Did we stay in our lane? Did we abide by our own code of conduct? What could we do better?
It’s not an audit. Ticking the box and moving on is pointless. This is about development and being better. Everyone needs to buy into this idea.
This is normal. The majority of boards, and certainly most high-performing boards, embrace these ideas.
And when you get to a full review
The chair leads. The chair must own, promote and lead the follow-up of any evaluation. Without this, time is being wasted.
Make clear the objectives. Why are we doing this and what do we want to achieve?
Who will be evaluated. Directors or directors and management. Will outside perspectives be sought?
What will be evaluated. Get an outline from the people running the process so everyone is clear on scope.
Who will conduct the evaluation. What are their credentials and experience?
What techniques will be used. Really important this. We run a “mirror up” process on the basis that most intelligent directors know what is going on but perhaps not why. This gets aggregated and fed back. Real honesty can be confronting, and boards need to be prepared for this.
Confidentiality. Interviews are confidential, feedback is anonymised. Management is not exposed at the individual level. Who sees the report? Is it subject to OIA? All this needs to be clear. Especially important for peer-review individual reports.
Input. Who sees the whole-of-board draft, and what input does the organisation have at that point?
What will you do with the results? The reviewers should work with the board to outline an action plan. That is locked into the board’s annual work plan. Progress checks at every meeting.
Work through these steps and you will be well on the way to becoming an open-minded learning board.
----------------------------
Rich Fields and Rusty O'Kelley, Russell Reynolds Associates, posted in Harvard Law School Forum on Corporate Governance, Friday, October 21, 2022
2 Global Network of Director Institutes 2022–2023 Survey Report3 PwC Inside the executive mind. Governance Insights Center 2025
