TOWARDS DYNAMIC GOVERNANCE 2014
European Corporate Governance Report BOARD EVALUATION HOW IS THE BOARD PERFORMING?
In 2011 we recommended the best practice of regular qualitative reviews of board composition, performance, behaviour and cultural and team dynamics. The 2014 benchmark assesses how widely that practice has been adopted.
Frequency of board evaluation
Around 78% of boards have undergone some form of evaluation since our 2011 benchmark.
On average, 70% of boards undertake a formal review annually – this fi gure is higher in the United Kingdom (100% undergoing an evaluation on an annual basis), Sweden (87%) and Finland (81%).
One in six boards across the region report that they currently do not undergo any type of performance evaluation.
Responsibility for evaluation
Evaluating the board is more likely to be the responsibility of the Chairman (41%) and/or other board members (33%).
Evaluating the Chairman is more likely to be the responsibility of other board members (53%).
Evaluating the CEO is more likely to be the responsibility of the Chairman (30%) and/or other board members (52%).
External evaluation
21% of boards that conduct annual evaluations use external facilitators or consultants. A third of boards never use external consultants.
Evaluation methods
Methods vary: 78% of boards use questionnaires 65% use open discussions 54% use one-to-one interviews of directors
Heidrick & Struggles 31
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