Board performance evaluation has come a long way. What was once an informal self-assessment process has become a structured, strategic tool for good governance. Even in underperforming organisations, strong board collaboration and preparation can drive long-term success.
Evaluating how a board performs isn’t just a box-tick anymore, it’s key to making sure that strategy, compliance and team dynamics all line up, according to transformation executive Genevieve Hawkins GAICD.
Boards once saw evaluation as optional, she adds. “I can go back to the days of people going, ‘Assessment? What’s that?’. Early on, boards would say, ‘We can just do it ourselves, let’s just self-assess informally.’ But we’ve seen it evolve to much more sophisticated ways.”
Hawkins says the risk of marking one’s own homework is that boards can overlook blind spots fresh eyes would catch. Regular evaluation is no longer a cosmetic exercise, but a governance imperative, examining everything from strategic alignment and stakeholder satisfaction to compliance, board composition and diversity. Executed well, it maximises effectiveness; but done poorly, it leaves systemic weaknesses unchecked.
Hawkins recommends that chairs test board performance on two levels, outcomes and inputs (dynamics).
The outcomes test asks whether the board’s work is translating into success. Is the organisation achieving its strategic objectives, creating sustainable value and sustaining and improving its reputation?
Even when an organisation is underperforming, Hawkins says the outcomes test can still be instructive — performance should be judged against expectations and the progress of any reset or transformation program.
The inputs or dynamic test looks inwards at how the board operates as a team. “A telltale sign is, are we seeing the same issues repeatedly coming in?” says Hawkins. “If so, we’re not creating a learning organisation”.
She recommends that chairs probe whether the board has a genuinely diverse mix of voices. “If I’m a chair, I can look at the board composition. Do I have a diverse set of voices at the table? Are all these voices being heard? How much dysfunction is there? How many meetings are there before meetings, how much politics is being played?”
Crucially, a board can work with an underperforming organisation, yet still be a high-quality team. Hawkins describes the ideal boardroom as one filled with people fully committed to achieving the right outcomes, where members prepare well for their role, acting as a “we” not a “me”.
“If we’ve got all of that, I can say, ‘OK, it’s an underperforming organisation, but from an input point of view, this is a darn good team of people focused on the right issues and we are confident in what this will ultimately produce in outcomes. It will just take time,’” says Hawkins.
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External evaluation
Board evaluators are key to the process, she says, and are a valued means of effectively putting the board “in a fishbowl” and assessing how board dynamics unfold in real time. They also impact the board’s ability to lead strategic conversations and effectively problem-solve.
Nicole Karagiannis GAICD, country manager at MyHR and coach to executive leaders and board directors, says she has seen significant growth in the number and scope of board observers and evaluators, who even a decade ago, were largely focused on governance and compliance.
“Give a board observer a checklist and ask them to come back with what they see,” suggests Karagiannis. “For effective boards, peer review and 360-degree feedback tools are useful.”
Karagiannis values formulating a robust evaluation process that provides a yearly review at a minimum — and maintains objectivity.
Communication, she adds, is key to this process. “Are we as a board having good, robust conversations in the way we would expect the (organisation’s) leadership team to behave? The big piece around high performance is really assessing — are we seeking feedback from each other? Are we self-reflecting? That’s so underrated. Also from the leadership team, the CEO and management team – are we in sync? Are we aligned?
“That leads into the final piece on high-performing boards. The best boards I’ve seen have an equal voice. I’ve seen a trend in modern boards — it’s not just the chair’s role to ensure someone has had their opinion heard. We need to look after each other as board directors, and give everyone a chance to speak.”
Karagiannis recommends the assistance the AICD provides via its Board Insights performance assessment tool, powered by BoardOutlook, which is a scalable, data-driven subscription service to help boards lead with greater clarity, confidence and impact.
By benchmarking your board’s performance against similar boards in your sector, she says directors can get a clear, evidence-based view of its effectiveness. Working with BoardOutlook’s experts to unpack the results allows them to close the gaps and chart a practical path forward.
“It’s crucial for board performance to be data-driven in today’s environment, because there is just so much boards are being asked to do,” says BoardOutlook CEO and co-founder Steve Pell. “The obligations and remit are so large, it’s not possible to do everything simultaneously. So board performance does become, in a way, a prioritisation exercise. If you’re asked to prioritise, you need data to make those decisions in an educated manner.”
Reflecting on how times have changed, Hawkins says she is seeing more scenario testing incorporated into board assessment. Taking cybersecurity as an example, she says boards are stress testing readiness to effectively respond to emerging risks. “What I’m seeing is a more proactive evaluation of performance.”
But Karagiannis cautions against board assessment leading to rushed judgement, advocating patience that is being tested in the face of rising economic pressures.
“A board director role is supposed to come with resilience. You need to role model that ability to keep an eye on the future and play the long game, rather than reacting to the pressures of the present.”
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