Board analysis is a study of the structure, composition and operation of a board. Its goal is to determine if a board is equipped with the proper balance of outside and inside knowledge, experience and objectivity to provide management with advice and oversight and formulate strategy. It also aims to determine how a board performs as a unit and if the board is able to effectively support the CEO and contributing to the company’s growth.
The best boards are those that have an atmosphere of openness trust and collaboration. They are well-versed in the organization’s structure and are able to challenge management with important questions. They are focused on long-term health and can identify risks and opportunities. They collaborate with stakeholders to ensure that the board is able to understand their own stake, work towards changes in corporate behavior and contribute positively.
According to McKinsey’s 2021 global study of more than 800 directors, the best boards consist of non-executive directors (NEDs) with years of experience and executives who have a deep understanding of the business. They have a clear structure and set of guidelines to guide their decisions, and they’re determined to improve the efficiency of the board and its committees.
A board evaluation is a valuable instrument to help a board evaluate its performance and provide feedback to the Chair and CEO. However there are many boards that have not set aside time for this. Taking the time to conduct an objective, third-party assessment could open the eyes board members to possible pitfalls and encourage them to improve from good to outstanding.
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