Regardless of the sector, good leadership is essential and, as organisations increasingly rely on their boards for leadership, success and growth, regular board evaluations have become essential. This article was originally posted on Business Post.
According to Carol Bolger, Chartered Director and an experienced Board Assessor with the Institute of Directors Ireland (IoD Ireland), the board is a ‘strategic asset, and organisations should work to maximise its value’.
"Boards are there to ask the right questions, bring an external perspective to discussions, challenge management, and add value through their diverse experiences”, she said. “So, a well-utilised board can function like a team of high-performing consultants."
The experienced assessor likens the evaluation process to holding a mirror up to the board. "We ask board members to reflect on their performance against best practice standards,” she continued. “It is not about criticism or finding fault, but about highlighting both the strengths of the board and potential areas for improvement. The outcome is an objective, candid, confidential, and actionable report which helps the board to enhance its effectiveness."
And, she says that it is also very important for the evaluation process to be handled carefully.
"It needs to be independent, confidential, and conducted by an expert assessor with a deep understanding of best practice governance and real-world board experience,” she stressed. “Additionally, it must consider the unique nature of the organisation and the context in which it operates."
For these and other reasons, many organisations are opting to conduct board evaluations through IoD Ireland. In fact, numerous organisations, including publicly listed companies, regulated entities, and State bodies, are required by their respective corporate governance codes to carry out regular board evaluations. These typically involve an annual self-assessment and an external evaluation every three years.
A well-utilised board can function like a team of high-performing consultants
“An independent evaluation leverages the directors’ insights and experience to enhance the board's overall effectiveness,” said Bolger. “It adds value for the organisation and its stakeholders, supports compliance with statutory and regulatory requirements, and encourages each director to reflect on their personal contribution to the organisation’s success.”
Since 2009, IoD Ireland has been assisting Irish organisations with board evaluations, and building substantial expertise in assessing the effectiveness of boards across a diverse range of entities. These include small private companies, large corporations, publicly listed companies, regulated entities, not-for-profits, and State bodies.
At the core of IoD Ireland’s approach is its vision for Ireland to be a model of corporate governance – and the organisation’s mission is to foster trust and confidence among stakeholders by educating, guiding, and supporting directors and business leaders to lead with success and sustainability.
IoD Ireland also draws on the global expertise of its fellow members in the Global Network of Director Institutes (GNDI) to bring cutting-edge thinking, on board performance and effectiveness to Irish organisations.
With this in mind, Bolger emphasises that an effective board must leverage its collective strengths, critically assess the information before it, engage in diverse discussions, remain attuned to the needs of both internal and external stakeholders, and lead a governance framework which aligns with the organisation’s unique context. These and other key areas are evaluated in board assessments - while trust is also fundamental to the process.
“The evaluation is truly a partnership between the assessor, the Chair, and the board,” said Bolger, an experienced independent director, who has served as Chair of An Post and on the boards of the Coombe Hospital, the Health & Safety Authority, and also various private sector companies.
“Trust allows for an environment where board members feel comfortable providing honest feedback in a constructive manner. I have worked with boards during their first evaluations, where there can be initial caution due to uncertainty about the process and its outcomes and I have seen how vital it is to build trust with the Chair, instil confidence, and reassure the board that IoD Ireland’s goal is to add value to help enhance board performance. We bring a wealth of experience framed by best practices.”
Each board evaluation is uniquely tailored to the organisation’s nature and circumstances, so there is no one-size-fits-all approach. The process begins with an experienced IoD Ireland assessor collaborating with the organisation to understand its business context, governance structure, and strategic goals.
“We work together to define the scope and objectives of the evaluation upfront,” said Bolger. “A customised questionnaire is prepared based on best practice frameworks and adjusted to the organisation’s specific context – and we consult with the Chair to ensure the questions are relevant. In most cases, we also conduct one-on-one conversations with individual board members, and increasingly, with members of the executive team. Engaging with the executive team can provide valuable insights into the operation of the board and the organisation's overall culture.”
The data gathered from both the questionnaires and interviews are analysed, and an initial report is drafted, which is then reviewed with the Chair before the final report and recommendations are presented to the board.
“We focus on nine key areas, such as strategy and culture, and assign scores to each,” Bolger explained. “We highlight where the board is excelling and where improvements are needed and provide actionable recommendations. For instance, the board might need to enhance risk management processes or pay more attention to succession planning.”
“A board evaluation can often act as a catalyst for change, and IoD Ireland can assist boards and nomination committees in starting those important conversations. Additionally, as part of our evaluation, we assess board composition and identify any skill gaps which may need to be addressed.”
Bolger also notes that boards are increasingly expected to have expertise in areas beyond traditional governance, such as emerging technologies like AI, cybersecurity, climate change, social impacts, economics, and the effects of new regulations in these areas.
We highlight where the board is excelling and where improvements are needed and provide actionable recommendations
She believes that regular board evaluations are beneficial for every organisation, and it is one of ‘the most effective ways for a board to enhance its performance, both as a collective and for individual directors’.
“Having been an independent director and Chair myself, I’ve experienced the evaluation process from the other side, so I understand its value,” she said. “In today’s rapidly changing business and economic landscape, every board should be continuously striving to optimise its effectiveness, and a board evaluation with IoD Ireland is the best way to begin.”
IoD Ireland Board Evaluation Service
Raising corporate governance standards
