Boards are coming under increasing scrutiny. Making time to reflect intentionally and purposefully on board effectiveness is no longer a ‘nice to do’ exercise, but a must.
For many organisations – an external board evaluation isn’t optional. It’s mandatory for FTSE 350 companies to have an independent board evaluation every three years.
For unlisted companies, public bodies and non-profits, it has become a matter of good practice to evaluate board effectiveness and it’s often embedded in their governance codes.
But, whether or not you’re required by law to complete an external board evaluation – it’s definitely worth doing, and doing properly. Because the outcomes can be transformative! Value adding board evaluations not only help you understand how your board is functioning right now but identify how a board can work even more effectively and deliver greater value.
When something is deemed obligatory, there is always the temptation to treat it like a tick-box exercise – a quick online assessment or a limited evaluation focused on policies, structure and processes. Our advice would be not to give in to that temptation, because you are unlikely to reap the benefits a more thorough approach would yield.
We know from research that value-adding board evaluations focus on the human dimension – as well as governance. And they directly address the areas that typically get in the way of board effectiveness. Things like the interactions between board members and the executive team; the levels of trust; how outward-looking your board is; and, crucially, how your board deals with differences of opinion and diversity of views.
Two client examples are a case in point:
One of our clients had been established by four organisations who normally competed with each other. It was a complex shareholding arrangement. Through our evaluation we were able to highlight key areas of shared purpose that enabled the board to align and where collaboration, not competition, was needed. The evaluation unlocked conversations the board needed to have and let to improved ways of working.
Another client operates in the world of high-performing sport. As our evaluation takes a holistic view, we found that the board wasn’t engaging sufficiently with key stakeholders who happened to be key funders. The board was able to redress the issue to the long term benefit of the whole organisation.
A holistic approach is the key to a value adding Board evaluation
At Mightywaters we have developed a framework, the GIFT framework, which helps us to look at all aspects of board effectiveness through four lenses.
G – looks at Governance – policies, systems and structures that support the work of the board
I – assesses Interactions – focusing on the quality of relationships and behaviours between board members
F – is about Focus – looking at how the board ensures its work delivers impact
T – considers the Team – examining how the board is selected, resourced, developed and run
How we work combines observation, a board diagnostic, interviews, and reviews of processes and papers. And we leave the Board with evidence and research-based recommendations that act as a springboard for action. Throughout the whole process we work with your Chair and other key stakeholders, and facilitate a discussion of the findings and recommendations with your board so that an action plan is developed that the board is committed to.
At Mightywaters, board evaluations are therefore never a “must do”, but rather an opportunity leveraged.
If you are a NED, Trustee or Executive Board member we would love to speak with you and explore how your Board could unlock its untapped potential.
Please email: anna.withers@mightywaters.co.uk
