Why Conduct a Review?
Exerpt from Dr. Leblanc’s book, Inside the Boardroom: How Boards Really Work and the Coming Revolution in Corporate Governance (pg 101). Reproduced with permission.
Boards that conduct rigorous formal reviews of board and director performance, however, find the process valuable. First, it compels the chair or lead director and directors to look inward to assess what factors are relevant for superior board performance and how they should be measured, e.g., the adequacy of the information that board members receive before and at meetings, the appropriateness of the agendas, the effectiveness of committee operations, etc.
Second, conducting assessments also compels board members to consider how well the board is dealing with its strategic tasks, how well it is making decisions, the state of the company’s relationship with its stakeholders, etc. Assessments are not simply meaningless acts with no operational substance. They bring out tangible enhancements of overall board operations, which, of course, is what they are designed to do.
Third, the boards that engage in assessment find that it increases the level of discussion about governance, encourages opinions to be shared by all directors — both orally and in writing, and enables attention to be paid to specific governance issues that might otherwise have been neglected.
Fourth, they find that, when the board makes its expectations explicit in the form of position descriptions and subjects itself to internal review, it signals to shareholders, management and other corporate stakeholders that the board is an active and engaged one, and that it has set explicit internal goals and priorities for which it is responsible.