Board Committees and Board Evaluations

A board of director’s success mirrors its ability to administer governance. However, board members may not always have the resources to monitor current economic trends and understand their impact on an organization. It is essential that directors gather information on useful strategies and relevant issues to help pose informed questions at board meetings, supply in-depth analysis and share feedback.

For a corporation to successfully ensure its board of directors has the capacity and skills to provide strategic guidance, regular board evaluation is essential. An effective board committee can help by ensuring that the board of directors meets all of its professional expectations, including maintaining a relationship with the responsible Minister and ensuring successful board compliance.

Board Evaluation

Regular board evaluation helps ensure that board standards are maintained and the corporation is capable of ensuring long-term viability and credibility. This is true for both for-profit and not-for-profit Boards of directors. Board evaluations can assess the board’s collective knowledge base, ability, and commitment to fulfilling their responsibilities. This includes a solid understanding of the responsibilities of the board of directors under all relevant legislation, the expectations of the Government of Canada, and the environment in which the corporation functions.

Members of a board of directors may also be assessed on the fulfilment of their responsibilities for the stewardship of the corporation. A thorough board evaluation will determine board effectiveness and whether its members are acting in the best interests of the corporation and promoting the highest standards of corporate governance.

The Assessment process

The nature of the assessment process for boards of directors varies widely - organizations should choose the methodology that best suits their operation. Regardless, the Chair should choose the process with the support of the board of directors.

Best practices for board committees suggest that the board compliance process should have four elements.

1. The participation of all individual directors to ensure a shared understanding and acceptance of the benefits of the board evaluation.
2. A well thought-out, systematic process to establish an effective board evaluation timeline.
3. Carefully selected board evaluation instruments to ensure that resulting information is valid, efficient and accurate.
4. A thorough follow-up to confirm that areas of concern have been addressed, and board evaluation information has reached the right people.

For any organization, incorporating a mix of different assessment processes into board evaluations is likely to provide a more detailed and accurate view of how well a board is functioning.