How Should Board Directors Evaluate Themselves?

Buy this article E-mail this page 

In a recent survey, 72% of board directors indicated that their performance ought to be evaluated. Yet only 21% of the boards of public companies actually conduct such assessments. Part of the problem is that organizations often don’t know how best to implement a board self-evaluation procedure, so many simply avoid the practice. Others have implemented the process only to become frustrated because it took so much time and produced so few results.

To investigate the different self-evaluation practices used, the authors studied eight boards that have engaged in the process for at least two annual cycles. They found two high-level variables in the protocol for self-evaluations: the structure of the data-collection methodology (low versus high) and the confidentiality of data (unimportant versus important). These dimensions define quadrants of four different approaches to self-evaluation: informal, legalistic, trusting and systematic. Each approach has important implications for a company’s board rating, directors and officers insurance and various other issues.

Laurence J. Stybel and Maryanne Peabody are founding partners of Board Options Inc., a Stybel Peabody Lincolnshire company. They can be contacted at lstybel@boardoptions.com.

$	6.50	Buy PDF
$	12.00	Buy PDF and permission to copy
$	5.50	Buy permission to copy from your own original
$	6.50	Buy paper reprint
$	12.00	Buy paper reprint and permission to copy

Academic pricing and volume discount information

[top] [back]