"Everyone knows what boards have been: gentlemen's-club-era relics characterized by ceremony and conformity. And everyone knows what boards should be: seats of challenge and inquiry that add value without meddling and make CEOs more effective but not all-powerful."
Never has the glare of the spotlight been more squarely focussed on boards of directors. Governance is an increasingly hot topic and a spate of corporate scandals around the world has only turned up the heat. Renewed rigour is being called for – not only in the corporate world but throughout government and non-profits as well.
In response, many board directors are asking, how good is our governance? This raises the related question: what kind of assessment or evaluation will provide a reliable answer?
At first blush, evaluating a board may seem a simple task. Upon closer inspection, however, this prospect raises complex issues. The purpose of this note is to help board chairs and others to understand both the potential and the pitfalls of evaluations.