Part 7: Board Evaluations: Discussion & Follow-Up

It is important to remember that while an independent reviewer carries out the assessment and may be invited to make recommendations based on their experience and knowledge of good practice, it is the board itself that must decide what actions it intends to take to address any issues that have been identified. The purpose of a regular evaluation is to help the board identify how it can continue to improve its effectiveness and to take ownership of actions that are agreed upon as a result of the process. 

Therefore, the board should always discuss the reviewer’s report and findings. It is standard practice for the reviewer to discuss the report with the board chair (and whoever has overseen the review process for the board if different) before the board meeting so that the chair can decide how the report should be presented and the discussion structured. 

Follow up actions 

Any follow-up actions will be determined by the findings of the evaluation but might include, for example:  

• changing the board composition over time and updating the skills matrix;   

• reviewing the committee structure;  

• adjusting the length and frequency of meetings;  

• improving the content and timeliness of board papers and  

• arranging training and development for one or all board members. 

Once the board has agreed on what actions should be taken, these should be converted into an action plan, and the board should review progress at regular intervals. The company secretary will normally maintain the action plan, which should include the deadline by which each action should be implemented and the name of the individual responsible for doing so. In between full board discussions, the secretary should report to the board chair on progress.   

Public reporting 

In some markets, listed companies are expected to report on their board evaluation in their annual reports. Companies may not wish to discuss publicly findings that raise sensitivities, but boards that can demonstrate they have carried out a robust evaluation and are intent on delivering continuous performance improvement may gain some credibility with investors and other stakeholders.  

Some corporate governance codes require companies to disclose the identity of the board reviewer they used and whether they have any other commercial relationships with them. Boards might also consider including in their annual reports (we have adapted this list from CGI’s best practise):  

• The scope of the evaluation, for example, whether it covered only the effectiveness of the board or also looked at the performance of the committees and individual board members; 

• A summary of the different processes used and whose views were sought as part of the evaluation; 

• Any aspects of its performance that the board has concluded can be improved and, wherever possible, the specific actions they intend to take to do so; 

• Where companies have identified specific actions that they intend to take in previous annual reports as a result of the evaluation carried out in that reporting year, they should report on whether those actions have been implemented.

Questions the board should consider 

READ MORE IN OUR SERIES ON BOARD EVALUATIONS HERE.