How to conduct an effective board assessment: a step-by-step guide

How to conduct an effective board assessment: a step-by-step guide

By OnBoard, by Passageways
30 January 2023
Partner Content

Your directors should conduct a board assessment annually. Let's examine what a board assessment is, and how your board should evaluate itself.


Board directors are the strategic leaders in an organisation. Because this role is crucial, they must regularly evaluate strategies to ensure they fulfill their duties and drive the organisation toward its mission. 

For corporate boards, not-for-profit boards, hospital boards, and others, conducting an annual board assessment not only keeps the ship on course, it also proves critical to improving overall board effectivenessand accountability.

However, the assessment results are only as good as the quality of your evaluation process. 

This article covers the following: 

  • The meaning of a board assessment (and why every board needs it)
  • A simple, step-by-step guide to conducting effective board assessments
  • A powerhouse of board meeting tools (including board assessment tools) 

What is a board assessment?

A thoughtful board assessment measures how well a board fulfills its responsibilities and meets certain standards or objectives. It also keeps the board’s long-term strategy in focus, identifies gaps in skills and functionality (a board skills matrix helps with this), and offers fresh insight into what’s working — and, more importantly, what’s not working.

Put simply, a board assessment tells you how you’re doing. Are you staffed appropriately? Are you leading effectively? Are you asking the right questions and offering constructive feedback? Are you organising board meetings for maximum productivity and the honest exchange of ideas? Are you conducting business with transparency? Is everyone contributing, staying engaged, and working together to achieve common goals?

A board self-assessment requires more than simply checking the appropriate box on a board of directors questionnaire to meet regulatory requirements. It involves seeking information in a variety of ways to truly understand the board’s capabilities and preparedness to meet the challenges faced by public and private organisations. Most board member evaluations ask questions about:

  • Composition, diversity, and skills
  • Director independence
  • Quality of meeting discussions
  • Succession planning
  • Committee responsibilities
  • How information gets to your board
  • Whether environmental, social, and governance (ESG) objectives are being met

Understanding the importance of board assessments

Directors face mounting pressure from shareholders and regulators to demonstrate effectiveness. Board assessments examine composition, structure, and performance to reveal whether the board is competent. 

As boards position themselves to work through new and old challenges, a thoughtful board evaluation helps members gain insight on how well the board and management team function together, improves alignment on key issues, and strengthens the overall effectiveness of the board’s policies and procedures.

Demonstrating a willingness to conduct a board assessment with transparency also shows a board’s strong commitment to fulfilling its governance responsibilities.

The New York Stock Exchange requires an annual board member self-evaluation for boards of all publicly traded corporations. Many influential investors also demand that public, private, and not-for-profit organisations conduct a board assessment before investing.

When a board clarifies the individual and collective roles and responsibilities of its directors through an annual not-for-profit board evaluation or public company board appraisal and performance process, it becomes more effective and:

  • Board meetings go smoother
  • Directors get better information
  • Boards acquire greater influence
  • Boards pay more attention to long-term strategy
  • Working relationships improve between a board and management

How to conduct a board assessment

Board evaluations vary and should be tailored to your board’s unique needs for the best results. Here’s a typical step-by-step procedure for conducting a board assessment. 

1. Outline the board assessment process

The first step is to establish your assessment process.

Common evaluation methods include: 

  • Peer reviews
  • Personal interviews
  • Board member questionnaires (written or oral)

The most common board evaluation template is the written board of directors questionnaire. Be sure to update questionnaires each year to reflect your organisation’s current environment, and always check to make sure the prior year’s recommendations have been achieved.

Use well-structured questions that draw out meaningful feedback. To achieve that, your interviews, peer reviews, or director questionnaires should focus on critical aspects of the board (more on this in step 3). 

One-on-one interviews can be conducted by the independent chair/lead director for your board assessment, or by a third party. Personal interviews allow for follow-up questions and for directors to elaborate on answers in further detail.

2. Appoint board assessment lead

Next, identify who will coordinate the process. Some organisations appoint the board chair to lead the assessment. Others prefer independent third parties to make the evaluation unbiased.  

3. Identify board assessment topics

The types of questions asked in a board assessment vary from one organisation to the next, and each must be customised and prioritised to gain the most useful and valuable feedback. Make sure your questions are clear, direct, and focus on core board duties and oversight functions. Topics include:

  • Long-term strategy, risks, and financial performance
  • Board composition, structure, and diversity
  • Company integrity, reputation, and culture
  • Management performance and succession planning

Sample questions include: 

  • How does the board handle internal conflict? 
  • Are meetings informed and effective? 
  • Does the board value diverse perspectives? 
  • How does the board promote constructive disagreements in discussions? 
  • What ways to engage board members would you recommend for the board?

Consider including these board engagement survey questions, too.

To find relevant assessment topics unique to your board: 

  • Examine board member qualification requirements, corporate governance guidelines, policies, committee charters, and organisation codes. 
  • Check meeting documents, such as agendas and minutes. 
  • Identify how interested shareholders are in the board’s role, composition, and oversight

4. Send post-evaluation summary

After the board assessment, disclose a detailed post-evaluation summary to shareholders or investors. To help streamline future assessments, ask participants how the process was and how to make it even better. You can leverage voting and approval technology or secure messenger to solicit feedback.

5. Partner with a third party

For an unbiased process, consult with a third-party advisor. They can implement the whole procedure, develop assessment questions, conduct one-on-one interviews, and analyse feedback.

Independent consultants make the assessment objective because they have no ties with the organisation or the board. Additionally, experienced third parties offer fresh perspectives into the whole process for better assessment results and improved action plans. In addition, directors may be more open when speaking with an outside consultant.

Self-assessment vs. third-party consultants

Board assessments can be completed by conducting board member self-evaluations and peer-review surveys, both of which often fall under the responsibility of the board’s nominating and governance committee. The evaluation process might also involve hiring independent third parties, internal advisors, and external legal counsel to facilitate the process. 

One-on-one interviews can be conducted by the independent chair/lead director for your board assessment, or by a third party. Personal interviews allow for follow-up questions and for directors to elaborate on answers in further detail.

A benefit of hiring a third party to conduct your board assessment is board members may feel more comfortable in the process, and possibly provide more candid answers during confidential interviews. 

Conduct effective board assessments with OnBoard, by Passageways

Board portal platforms may help streamline the assessment process. For example, OnBoard offers pre-built assessment templates crafted by governance experts. It gathers feedback anonymously to create insights into board performance based on candor and authenticity.

With the ability to send and receive responses digitally, OnBoard streamlines the assessment process. Once the results are in, insightful data visualisations enable focused analysis for more informed decision-making.

If you’re considering board management software, download our Board Management Software Buyer’s Guideto learn how to select the right vendor.

Frequently Asked Questions (FAQ)

What Is the Purpose of a Board Assessment?

A board assessment examines whether the board is fulfilling its responsibilities and meeting relevant expectations. Evaluations are foundational to board improvement and directors acting in shareholders' and the organisation's best interest. 

What Is a board self-assessment?

It’s an internal board evaluation with no third parties involved.

Ready to upgrade your board’s effectiveness with OnBoard, by Passageways? Schedule a demo or request a free trial.

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