In a recent analysis of over 500 board surveys, Halex Consulting in association with its Board Benchmarking strategic partner, found that 25% of all boards are dysfunctional. This finding underlines the vital importance of performing a robust annual assessment of board performance.
In this article we explore the benefits of using an objective, externally facilitated annual board review to ensure the elephant in the room doesn’t get ignored again.
The evolution of Board Benchmarking: A necessary shift for effective governance
In the dynamic corporate governance landscape we face today, the traditional approach to annual in-house assessments of board effectiveness is becoming increasingly outdated. While larger organisations may periodically commission an external review every few years, far larger numbers of firms remain reliant on in-house assessments, missing out on the benefits of external facilitation.
Challenges of traditional (in-house) board assessments
Traditional in-house board reviews, usually conducted via surveys, face several limitations:
- Incomplete coverage – Often failing to encompass all necessary areas for a comprehensive board effectiveness assessment.
- Reserved responses – Anonymity concerns lead to tempered feedback, impacting the authenticity of responses.
- Resource intensity – Time-consuming processes burden the Company Secretary and their team. Moreover, the heavily manual process may be prone to errors.
- Misinterpretation risks – Averaged response ratings to survey questions without context can lead to incorrect assumptions about board effectiveness.
- Lack of comparative analysis (benchmarking) – Absence of comparative data hinders a board’s understanding of its performance relative to its peers.
The benefits of facilitated annual board assessments
Recognising these limitations, Halex, in partnership with Board Benchmarking, have introduced a range of innovative, affordable, purpose-built board surveys complemented by robust benchmarking to support organisations through the annual board effectiveness assessment with a minimum of fuss and distraction.
This new approach enables boards, irrespective of size, sector or complexity, to quickly and efficiently gauge their performance against:
- An academically robust board effectiveness framework.
- A benchmark database of over 500 boards.
Why Make the Change?
The transition to externally facilitated annual board assessments is not just a trend but a strategic imperative:
- Comprehensive evaluation – Externally facilitated reviews provide a holistic assessment of board effectiveness.
- Candid feedback – External anonymity boosts honesty in responses, yielding more valuable insights.
- Efficiency and accuracy – Professional handling reduces administrative burdens and error risks.
- Context – Comparative analysis between board members and the wider executive provide additional context to survey results.
- Informed decisions – Benchmarking introduces a comparative perspective, enabling boards to identify and act on improvement areas.
A better approach
Save time, cost and effort while benefiting from a robust, objective assessment of your board’s performance.
Click here to find a survey that suits you best.
Get in touch to talk to one of our board evaluation experts or click here to try a shortened, FREE TRIAL board survey and benchmarked report.
Clicking on this FREE TRIAL link will take you to a simplified Board Benchmarking survey with 24 survey statements and two open-ended questions. Once completed, you will receive your benchmarked report directly to your email inbox.
Chris Burt,
Principal of Halex Consulting
Co-founder and Chair of the Risk Coalition
Chris is a CGI Accredited board reviewer and Principal at Halex Consulting, a leading boutique governance consultancy specialising in independent board evaluations and risk management advisory services. He is also a co-founder and Chair of the Risk Coalition, a not-for-profit, risk management think tank that aims to improve the effectiveness of risk management practice in the UK and globally.
Chris is the principal author of the Risk Coalition’s internationally acclaimed, ‘Raising the Bar’ leading practice guidance for board risk committees. He also Chairs the Risk Coalition’s Risk Committee Chairs and CROs forums, joint Risk Coalition/ISACA Tech Risk SIG and Halex Consulting’s own CoSec Forum for company secretaries and governance professionals.
Chris speaks regularly on risk and governance-related topics.
