Board performance issues are not uncommon and usually stem from one of the main elements. These issues include having the appropriate people on the board and creating a positive environment and ensuring that information is accessible, and conducting regular evaluations. Making the right choices in these areas is essential to improving the board and business.
Board members are knowledgeable about a wide range of topics However, if certain directors have more knowledge than others, it may hinder discussions at meetings. Boards can tackle this issue by conducting mandatory training sessions for all directors on topics of interest including M&A as well as new locations or updates to regulatory requirements. This will help raise knowledge levels and ensure that all directors are well-prepared for board meetings.
The board hasn’t created processes and structures that are suitable for executing its duties regarding evaluation, for instance, by establishing an internal committee for collecting and analyzing performance data, or regularly presenting assessment results to the board in order to be analyzed.
Boards should seek out third-party assessments that are performed by a third party. These evaluations provide an additional layer of experience and objectivity that could be missing in an internal review. Professional evaluators can help to avoid the risk of political gamesmanship by avoiding accusations and focussing on finding a common path forward for improvement. They can also serve as a neutral mediator to address sensitive issues involving group dynamics as well as individual egos. They can provide an organized plan for ongoing improvements, which include time-bound and measurable plans. They can also provide direction in line with industry trends and best practices, helping the board streamline its procedures and increase effectiveness of the board.
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