Motivated by investor pressure and a disruptive business landscape, corporate directors today are much more sensitive about who is contributing to the board and which skill sets are needed for the board to meet its fiduciary duties. The board evaluation is arguably the board’s most powerful tool for improving performance and aligning board composition with strategy; yet, research shows that many board members are still struggling to leverage assessments and refresh their boards effectively.
According to PwC’s Annual Corporate Directors Survey, 63% of directors find their self-assessment process to be a “check the box” exercise. So how can boards begin to move beyond that compliance mindset?
In this episode, Paul DeNicola, Managing Director, PwC’s Governance Insights Center, and George Anderson, Leader, Board Effectiveness Services, Spencer Stuart, join TK Kerstetter to share insights from their latest joint publication: Beyond “Check the Box” — Getting Real Value from Board Assessments.
One of the things we talk about in the paper is the idea of ‘changing the end game’. What we mean by that is for the board to shift its thinking from the self assessment is something we have to endure or get through…to thinking about the assessment as an opportunity to actually make the board better.
In 2017, Spencer Stuart’s U.S. Board Index reported an upswing in the number of boards that were conducting some form of individual director assessment (now 33% of the S&P 500). Anderson and DeNicola discuss various ways for boards to take a fresh look at their assessment process and ensure it becomes an integral part of both short- and long-term strategy execution.
“The assessment shouldn’t be an end in and of itself,” said DeNicola. “The assessment should feed into the overall board succession [strategy] as you look into your board composition over a long period of time.”