Evaluating your board's effectiveness
According to research, boards that take time to regularly assess their performance are more effective than those that don’t. Evaluating board performance can deliver a multitude of benefits such as developing a sustainable culture of review, learning and development; sparking conversations about board practice; helping identify skills gaps and recruitment needs; uncovering other important issues and setting expectations that trustees will develop in the role.
However, a study by Mike Hudson at Compass Partnership, in association with Cass Business School, has found at least 50% of boards (of charities with incomes less than £25m) do not currently review their performance.
Trustee resistance to review
Resistance to trustee performance review can arise from the fact that trustees see themselves as volunteers and don’t want to subject themselves to performance review.
Time is another issue. For a chair of a board with 15 trustees, the time commitment to regularly review all board members can be substantial. Chairs can often feel uncomfortable reviewing people they know outside the board and who are their peers.
Boards often fear that undertaking reviews of their governance practice will take time away from the limited time they have together as a board.
There can also be concern about what a board evaluation might uncover and which once revealed, can’t be ignored. Assessments can be “an acid test” for a significant number of governance related requirements such as role profiles, the expectations of the trustee role, selection, induction and training.
In spite of these issues, individual trustee and collective board performance reviews are thought to be a core contributor to better governance and high performing boards. Reviews enable a board to identify its strengths and areas where improvements might be made, hold trustees accountable for their performance and help board members develop a shared understanding of good governance performance.
What is effective evaluation?
Effective board evaluation is about a systematic assessment of how well the board (rather than the charity) is performing in relation to its legal responsibilities and to contributing to the success of the charity.
It looks at the performance of the whole board and the contribution of individual members. In all of this, the ambition should be to ensure that the review process is of benefit to the charity’s beneficiaries.
The Charity Commission’s The Hallmarks of an Effective Charity suggests that a "strong board" is one that can demonstrate that it has in place "a framework for evaluating board and trustee performance". The best performing boards invest resources in their development (time if not financial), regularly reviewing "how things are going" and taking action as necessary.
Where to start
Boards can only achieve optimum effectiveness if systems for regular review are in place that measure whole board effectiveness, the effectiveness of individual trustees, and key aspects of governance practice – and crucially, if the development plans resulting from these processes are implemented.
The task should be approached positively and with the attitude that the effort is justified to ensure charities are getting the very best from their board for the benefit of the charity and those it serves.
It’s important to make individual and collective performance reviews not merely a stand-alone activity, but part of an integrated approach to the development of the board which includes ongoing reflection of governance infrastructure, trustee education, recruitment and succession planning.
It helps if charities include as a "requirement" in the role profile and Code of Conduct that trustees will attend regular individual performance reviews so that there is an expectation from the outset that this activity will be part of the role.
How and when?
Board performance review can be something that is conducted occasionally, annually or as an ongoing activity. Some boards conduct a full review every three years, with lighter touch reviews of a particular aspect annually.
Board evaluations can be undertaken as a self-assessment exercise, but trustees need to be beware of a “check the box experience” where boards say: “Yes, we did a self-assessment; we do one every year (or every other year). Yet, no one can recall where the findings went or what happened as a result."
External reviews can be conducted by someone from outside the board, such as a consultant or even someone from another board who might observe the board in practice and offer feedback.
Good starting points
Here are three steps that can serve as good starting points for charities reviewing governance practice:
1. Keep it simple to start to build a shared recognition of the importance of regular and ongoing review and development, and a culture of review and learning. A good starting point would be to introduce short end of meeting reviews with the chair leading a discussion using questions such as “what have we achieved as a board as a result of this meeting?”, “what have we learnt about the charity that we didn’t know before?”, “how did we perform as a team?” etc.
2. Consider instituting a governance committee to oversee the introduction of a board review if one isn’t already in place. The chair will need to understand and champion the benefits of the activity, helping trustees to recognise the value and longer term benefits for the charity. They can help the board see it positively as part of an integrated approach to the development of their governance practice.
3. Ensure there is a timetable for when any reports relating to the activity will come to the board and this should be part of the calendar of board activities
Individual performance reviews
The Compass/Cass study on governance in larger charities identified "reviewing individual performance" as one of the top 20 drivers of good governance performance.
Individual performance reviews should be seen positively – and introduced positively by the chair – enabling the board to improve, rather than as a negative or judgmental activity and as something that encourages a constructive conversation between peers.
Here are ways to getting started with individual performance reviews:
Keep it simple, but build in good practice from the beginning. Having some formality to the process ensures that there is consistency of approach.
Discuss the principles at board level to get engagement. It is helpful if the chair initiates a discussion about the benefits of individual performance reviews.
Agree who will undertake the reviews. The assumption is that the chair will undertake the reviews, but it is perfectly acceptable for the chair to delegate the task to the vice chair or another trustee.
Agree timing. Set an annually recurring time for the review; choose a point in your annual cycle which allows your board to evidence good governance in the Trustees’ Report section of your annual accounts.
Agree what is to happen to the "findings" of review meetings. It is most effective if the chair collates key aspects of the results of the reviews (without identifying individual trustees), which are then fed into an overall development plan. The chair should stimulate discussion about the process and the outcomes, including any changes and improvements needed.
Trustees can discuss what might be learnt from this and what development activities they suggest for the whole board. This facilitates an integrated approach to discussion and planning the board’s development.
Agree a clear framework for the review process. Agree some questions to help trustees (and the chair) prepare for and structure the review meeting, plus a note summarising details of the board member’s trusteeship (e.g. how long on the board, which committees they are a member of etc.).
Seek feedback which can be a simple process of asking committee chairs for their feedback on members of their group, including attendance, participation and contribution.
Keep a record. It is helpful to keep a note of what has been said or requested in the trustee review. It helps both reviewer and trustee check progress (and whether agreements have been kept) on both sides. This record should be used in the subsequent year in assessing progress made.
Keep the activity alive and relevant. Periodically review the process by asking the board for their feedback, then adjusting the framework appropriately.
Also evaluating chairs
An ACEVO Governance Survey found that whilst 65% of charities said they carried out formal CEO appraisals on an annual basis over half do not undertake the same for chairs. Best practice suggests that every board member should be reviewed and the same approach described above for trustees can be used for chairs.
