Achieving Excellence in Governance
Governance Reviews & Structured Board Appraisal
Increasingly housing providers and other third sector organisations are adopting more rigorous board appraisal processes to improve their effectiveness and meet best practice guidelines. The collegiate nature of the governance task means that the primary focus is on performance at the collective level. However, there appears to be a consensus from the research that evaluation of individual non-executive directors does improve the effectiveness of the overall process.
Each board is at a different stage in its development, with different aspirations for the future; boards working within a group structure, for example, have different requirements from ‘stand alone’ boards. Board members are busy people with limited time, and board effectiveness review needs to be sharply focused and effective in its use of time. We therefore offer our tried and tested review and development process in the form of a ‘menu’ of options.
Board appraisal is on-going, and we recommend planning to review different aspects of the board’s functioning over an agreed period. The review process encompasses performance and competence at the individual and whole board levels, together with an independent element. It integrates statutory and regulatory requirements with current and emerging best practice in governance, and helps align strategy and board development.
Each board is at a different stage in its development, with different aspirations for the future; boards working within a group structure, for example, have different requirements from ‘stand alone’ boards. Board members are busy people with limited time, and board effectiveness review needs to be sharply focused and effective in its use of time. We therefore offer our tried and tested review and development process in the form of a ‘menu’ of options.
Board appraisal is on-going, and we recommend planning to review different aspects of the board’s functioning over an agreed period. The review process encompasses performance and competence at the individual and whole board levels, together with an independent element. It integrates statutory and regulatory requirements with current and emerging best practice in governance, and helps align strategy and board development.
1. Scoping, Project Initiation & Engaging the Board
Desk top review followed by site meeting with the project lead, Board Chair and Chief Executive to understand your requirements, and scope the project. Followed by introducing the process to members with discussion at a board meeting or pre-arranged event. The aim would be to answer the question; what do we want to know (what are the priority areas to focus on)? Ideally we would observe the rest of the board meeting to provide further data and external challenge.
2. Assessing Board Performance
A review of collective performance using Board Member questionnaires or telephone interviews. Similar discussions would also take place with the Chief Executive and executive directors, along with any governance support staff.
The structure of the questionnaire or interview would focus on the key priorities. For example they might include
The outputs can include
The structure of the questionnaire or interview would focus on the key priorities. For example they might include
- Board members’ views of their own contributions and the contributions of other Board Members to team working
- Assessment of the effectiveness of the Board overall including leadership, conduct of business and decision making
- Assessment of the performance of the Chair
The outputs can include
- A specification of required skills to guide the Association in delivering future strategy
- A skills audit to update any existing records
- Any conclusions about board composition
3. Assessing Individual Board Member Performance
Individual assessment is usually done by the Chair (with or without consultant support). Conducting individual Board Member appraisal is an important opportunity for the Chair to demonstrate their leadership role. Board members also gain much from having personal time with the Chair.
In our experience, where individual Board Member appraisal conducted by the Chair has limited success it is often the result of a) a reluctance to challenge colleague Board Members, in particular around behaviour or capability or b) a lack of skills or confidence in improvement planning, especially in a collegiate context. Many Chairs do not have the skills or confidence to begin or see through the ‘brave conversations’ they need to have. There can be a tendency to ‘fudge’ difficult issues, and fail to pin down clear improvement steps. In such circumstances our preferred model is for the Chair and independent consultant to conduct such conversations jointly, with the consultant acting as independent person, or coaching the Chair as necessary. The consultant brings an independent perspective, and in addition can collect data on the Chair’s performance to use in their own appraisal discussion. We therefore propose using a qualified and experienced executive coach who has specialist experience of governance for this part of the assignment.
Any feedback for the Board Chair should be discussed separately - either by the consultant or through the consultant providing a summary report to nominated board members (often the Chair of Audit, the Vice Chair or a senior NED).
In our experience, where individual Board Member appraisal conducted by the Chair has limited success it is often the result of a) a reluctance to challenge colleague Board Members, in particular around behaviour or capability or b) a lack of skills or confidence in improvement planning, especially in a collegiate context. Many Chairs do not have the skills or confidence to begin or see through the ‘brave conversations’ they need to have. There can be a tendency to ‘fudge’ difficult issues, and fail to pin down clear improvement steps. In such circumstances our preferred model is for the Chair and independent consultant to conduct such conversations jointly, with the consultant acting as independent person, or coaching the Chair as necessary. The consultant brings an independent perspective, and in addition can collect data on the Chair’s performance to use in their own appraisal discussion. We therefore propose using a qualified and experienced executive coach who has specialist experience of governance for this part of the assignment.
Any feedback for the Board Chair should be discussed separately - either by the consultant or through the consultant providing a summary report to nominated board members (often the Chair of Audit, the Vice Chair or a senior NED).
4. Skills Audit & Assessing Competence
The board needs to take a view about its preferred composition in terms of skills and experience; this will be influenced by the performance assessment as well as future strategy, and is best produced during a whole Board appraisal discussion or strategy development.
We can conduct a skills audit via questionnaire (either email or web based), using the statement of preferred composition, in order to establish the extent to which the Board has the experience and skills to effectively direct the Association’s strategy; and to identify any gaps between the actual and desired composition to inform recruitment . However, in our experience learning needs assessment (against required competencies) is best conducted as part of the discussions on individual performance so that training plans are linked directly to what would help board members improve their contribution and meet the current & future needs of the Association.
One tool available for competence assessment is our Competence Framework for Board Members produced in partnership with Castle Vale Community Housing Association and Kirklees Neighbourhood Housing (ALMO)
A profile of board competence is fed back with recommendations for recruitment/succession.
We can conduct a skills audit via questionnaire (either email or web based), using the statement of preferred composition, in order to establish the extent to which the Board has the experience and skills to effectively direct the Association’s strategy; and to identify any gaps between the actual and desired composition to inform recruitment . However, in our experience learning needs assessment (against required competencies) is best conducted as part of the discussions on individual performance so that training plans are linked directly to what would help board members improve their contribution and meet the current & future needs of the Association.
One tool available for competence assessment is our Competence Framework for Board Members produced in partnership with Castle Vale Community Housing Association and Kirklees Neighbourhood Housing (ALMO)
A profile of board competence is fed back with recommendations for recruitment/succession.
5. Testing Assessment Through Independent Observation
Process observation at one or more board meetings tests the analysis, and provides further data on how the board works together and the contribution of individuals. We can advise on or arrange alternative ways of testing the board’s self assessment, for example ‘benchmarking’ through visits to other boards or peer review with a partner organisation.
6. Governance Review
Conducting a Board appraisal exercise after or during a Governance Review can provide a rounded and rich picture of governance and board effectiveness. We recommend the Governance Assessment Process from The Governance Forum as a cost and time effective tool for Governance Reviews. We are licensed assessors for the GAP.
7. Outcomes
Can include a governance improvement and board development plan, board profile and gap analysis, a board succession plan and personal development plans