GNDI board performance evaluation guidelines

When considering a board evaluation, it's essential to maximise its impact for both boards and directors. This entails choosing the right process and maintaining a clear focus. Whether it's improving board dynamics, addressing capability gaps, or enhancing individual director contributions, a well-executed evaluation can yield significant benefits.

The Global Network of Director Institutes’ (GNDI) Board Performance Evaluation Guidelines bring together the lessons from board performance evaluations worldwide, considering the factors that impact the effectiveness and performance of boards. It has highlighted practices that will be of significant interest to boards contemplating their next review and wishing to ensure they are adding value to the organisation they serve. 

According to the GNDI Future of Board Governance Report 2022-2023,  more than 50% of directors feel that board evaluations are critical for improving board performance and this is one of their top priorities.

Key findings from the survey reveal that board evaluations offer numerous advantages, including pinpointing areas for enhancement, identifying director development needs and skill gaps, addressing underperforming members, fostering improved boardroom dynamics and communication, and demonstrating a commitment to robust governance to stakeholders. 

Although the specific approach to board evaluations may differ depending on the board's individual dynamics, maturity and requirements, the survey emphasises the indispensable significance of confidentiality and objectivity. These factors are instrumental in fostering open feedback and valuable insights. Nonetheless, securing honest feedback isn't always assured, highlighting the need for proactive leadership from the chair. It's imperative for the chair to spearhead a rigorous process and garner full commitment from all board members. 

Among the top priorities for enhancing board performance identified by the GNDI survey were director education on specific skills (57 per cent), refining board evaluation processes (52 per cent), and managing conflict of interests on the board (32 per cent).

In an era where boards are increasingly expected to possess expertise in diverse areas beyond traditional governance, such as technology, cyber risk, climate change, nature and wellbeing, regular evaluations have become more critical than ever for deliberately considering the skills present at the board table. 

The majority of GNDI jurisdictions recommend an external evaluation at least every three years. When is your board’s evaluation due and are you adequately prepared to run an effective process?

For those seeking support in conducting a board evaluation, the Four Pillars of Governance Best Practice offers guidance on evaluation criteria and procedures for boards.  

Furthermore, IoD offers a suite of board evaluation tools ranging from automated reports providing a quick overview to in-depth analysis to find out what makes your board tick. If you would like help deciding which evaluation is right for your board, please get in touch with the Governance Services team. 

 

About GNDI

The Global Network of Director Institutes (GNDI) is a network of leading director institutes, including the New Zealand Institute of Directors (IoD). It was established in 2012 to foster closer collaboration among its members. Institute of Directors in New Zealand Chief Executive Kirsten Patterson is the current chair of the organisation. This global reciprocity programme helps directors and their boards access resources from around the world. The GNDI includes 24 institutes representing more than 150,000 directors and other governance professionals.