Many boards conduct self-assessments, but not as many likely evaluate how their inner workings operate. Explore all you need to know about board committee assessments.
Board committees play an important role for many organizations, as they apply laser focus to specific areas such as strategic planning, finance, and governance. When committees do their jobs well, the entire board works more effectively. But how do you determine the effectiveness of your board committees? It starts with a board committee assessment.
While most board of directors conduct self-assessments of their boards as a whole, few boards engage in a regular and focused evaluation of their working parts. For instance:
- How many committees does your board assign?
- What are the committees’ goals and responsibilities?
- How big are your committees, and what’s their makeup?
- How often do they meet?
- What’s on their agendas?
- What information are they expected to provide to the entire board?
A thoughtful board self-assessment can give you fresh insight into what’s working and what’s not working for an organization, and may include general questions about certain committees, but few board assessment tools delve much further.
As committees’ responsibilities grow, so does their importance, and the need to assess them with the same discernment (or close to it) as boards themselves. For example, The New York Stock Exchange requires its issuers to conduct annual assessments of the full board and each of the mandated committees — audit, compensation, and governance.
But what should board committee assessments include? How should they differ, if at all, from regular board member evaluations?
An effective board committee assessment provides an objective view of each committee and its members, assesses the strengths and weaknesses of each committee, and demonstrates how each committee implements strategic plans for continuous improvement.
What to Evaluate in Your Board Committee Assessment
With increased regulatory compliance and escalating responsibilities for all boards, today’s board committees do much more to help the full board meet certain objectives and carry out its duties. When committees dig deeper into audits, compensation, or governance, for example, they can provide credible insights, reduce risks, and help the board improve its overall effectiveness.
But when it comes to conducting a board committee assessment, you get what you measure, says Susan F. Shultz, founder and CEO of The Board Institute.
Boards, essentially, need to trust their committees to be effective and focused on specific areas of the organization, so the full board can devote more time to strategic planning and following best practices.
“Outcomes include the ability to attract the best directors, spend more time on strategic discussion, enhance transparency, improve shareholder relations, provide targeted information and education, engage in more interactive and focused discussions, and objectively evaluate the committee’s effectiveness and value,” Shultz says.
A strong board committee assessment process strives to identify strengths and weaknesses in an honest and constructive format, while clarifying which gaps need to be filled, and then spurring discussions for meaningful follow-up. In short, a board committee assessment should give the full board insight into what’s working, what needs improvement, and where the board-committee work needs to continue.
In determining what to assess, board committees must evaluate not only whether they are helping the full board meet obligations imposed by laws and regulations, but also the effectiveness of board operations. To do this, a board committee assessment should review:
- Information gathered for each area of committee focus
- Agendas for every committee meeting
- Committee priorities
- Communication with each other
- Communication with management
- Board culture
- Individual director engagement
- Periodic deep dives into certain areas, such as cybersecurity or crisis management
What Changed for Boards in 2021?
Ways to Conduct Board Committee Assessments
Boards can use a variety of board evaluation tools to conduct board committee assessments, including written surveys, online assessments, 1-on-1 interviews, and third-party evaluations by a professional who specializes in board member evaluations.
- Written surveys help you take the pulse of your committees, and can help you determine which areas to emphasize for a deeper dive.
- Online assessments can deliver results in a pie chart or other graphic form for better visual understanding and clear, actionable steps.
- One-on-one discussions often result in a free-flowing conversation that yields more openness from committee members.
- A board committee assessment conducted by a third party can offer a higher level of objectivity and deeper insight.
Also, consider asking others outside the organization for feedback, such as external auditors and compensation consultants who may be in frequent communication with a committee. Your board may also benefit from seeking input from directors who aren’t serving on the committee.
However you perform your board committee assessment, just make sure it helps your organization benchmark, demonstrate, and enhance best practices in board-committee governance. The observations you learn can lead to candid discussions and specific action plans for the entire board to consider.
Some questions for a board committee assessment might include:
- Do we have the right people on the committee?
- Are we focused on the right things?
- Are we receiving the right amount and quality of information?
- Are we setting clear expectations for management, staff, outside consultants, etc.?
- Do we insist on transparency, and verify all information received?
- Do we speak our minds? Do we listen? Do we build consensus?
- Do we give the full board sufficient information to help them understand the work of the committee and the basis for its decisions?
When choosing board assessment tools, Shultz recommends looking for the following:
- Independence and objectivity
- Comprehensive approach with qualitative and quantitative terms
- Serves public and private organizations
- Focuses on performance, rather than process
- Goes beyond compliance
- Scalability
- Security and confidentiality
- Respondent anonymity
- Ease and speed of use
- Validated methodology
- Substantive report with current information
- Reporting of results controlled by the board
- Can be readily benchmarked
How Board Management Software Streamlines Board Committee Assessments
Boards of all types can use customizable board assessments and board committee valuations from OnBoard to glean insights unique to each organization. The results can help you discover opportunities for improvement and create an actionable plan. Check out OnBoard’s tips and software to streamline this process for your board.
Ready to upgrade your board’s effectiveness with OnBoard the board intelligence platform? Schedule a demo or request a free trial.
About The Author
- At OnBoard, we believe board meetings should be informed, effective, and uncomplicated. That’s why we give boards and leadership teams an elegant solution that simplifies governance. With customers in higher education, nonprofit, health care systems, government, and corporate enterprise business, OnBoard is the leading board management provider.
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