An effective board review looks forward, drives action and has buy-in from stakeholders. Your evaluation process will fail to achieve its goals if one or more of these six factors are at play.
1. The process does not drive action
All good review processes result in action. The process must be designed and executed with the intention of making changes where they are necessary. If you are conducting the review just to meet regulatory requirements or tick a box, the process will damage key stakeholders’ trust in the process and waste valuable time and resources.
To avoid this happening, boards may wish to start by focusing their process more narrowly. It’s more important to make meaningful progress than it is to cover every possible area of review. This approach will ensure that resources are focused on achieving outcomes that are unquestionably valuable to everyone involved in the process.
2. The business is facing major challenges
Board reviews may seem like a luxury when the business is facing significant issues, like financial stress or a broader organisational crisis. This will lead to disengagement with the process and a sense that you’re diverting precious time and resources away from essential issues.
If you’re facing this circumstance, it’s always worth exploring timing (i.e. can your review be rescheduled?). However in some circumstances there’s a regulatory obligation to complete a process that is unavoidable. If this is the case, the right approach is to focus narrowly on issues that may benefit the challenges at hand. Do not run a broad exploratory process, but instead target a single issue, turn the review around quickly and expedite resolution. This approach will help build trust with both board members and management and improve board performance at a time when it is most required.
3. The board does not practice collective accountability
While board debate is healthy, the board members must eventually come together to make decisions with collective accountability. You can run the best review process in the world, but it will be ineffective if some board members will not work together. This behaviour can and will cause harm to the board and is unlikely to be resolved without board renewal.
4. You have a weak chair
The chair plays a critical role in the board review process. They not only direct the process and required outcomes, but are also responsible for actioning recommendations. If the chair is not prepared to have the tough conversations required or does not have the respect of the board, the review may raise a lot of issues but is unlikely to achieve meaningful progress.