How effective is your board? – Part 3

Part 1 of this series on the evaluation of board effectiveness described various characteristics of some different approaches. Part 2 described some of the subjects and foci of board effectiveness evaluation. Part 3 now turns to the selection of methods and measures according to the purpose and intended use of your evaluation.

Evaluation Purposes and Methods

Various purposes have been identified for evaluation activities, and most of these have some relevance to the evaluation of board effectiveness. The header image above and the chart below offer different approaches to the description of purposes. The apparently simple approach in the header chart might be seen as paraphrasing the eight purposes defined by Robert Behn in the chart below.

Whichever definition of purposes you use, the point remains, that different purposes require

  • different types of data
  • different methods of collecting or capturing that data, and
  • different approaches to analysing and synthesising the information to make judgments about effectiveness.

The information requirements for each purpose summarised in the chart above will help you to determine what evaluation methods you should employ.

Some boards will use a single method to evaluate their effectiveness, while others will use a combination of methods, according to their evaluation purposes. The chart which follows highlights some of the more common methods used by non-profit boards. There are others of course, and if you are involved with a specialist organisation, you will probably use a customised tool or tools more appropriate to the nature of your work.

Continuous improvement

Sometimes directors find themselves begrudging a board effectiveness review or a self-evaluation activity. They may feel that it’s a box-ticking exercise; that it’s a chore being done to satisfy some bureaucratic expectation rather than being of real benefit to their work. Alternatively, they may feel that they have done these kinds of exercises before, and nothing changed or improved.

On the other hand, if they were asked whether there are opportunities for improving the effectiveness of the board, or whether there are matters they would like to see addressed, they would have to say yes.

Given this, the inclusion of a ‘reflective minute’ at the end of each board meeting, where a director is randomly selected by the chair to identify ‘one thing we did well’ and ‘one thing we could improve’, may well be the most useful approach to evaluation for many boards.

The opportunity for improvement needs to be framed constructively of course, and must go beyond identifying a shortcoming so that a suggested approach that would improve board effectiveness is offered. If the meeting agrees, such a suggestion could either be implemented from the next meeting, or referred to your Governance Committee for further advice.

If continuous improvement is one of the board’s values, then whenever ‘opportunities for improvement’ are identified they should be recognised and acted upon. Waiting for an annual survey later in the year is likely to result in missed opportunities. it could also mean that the commitment to continuously improve is considered tokenistic.

The MELD reflective governance model promotes the use of the ‘What?’, ‘So what?’, and ‘Now What?’ approach, and the chart below suggests a way of using that approach within your evaluation activities. This may be one of the ways you express your commitment to continuous improvement.

Question value

Not all questions you can consider for board effectiveness evaluation offer the same value. As detailed in my post ‘A question of skillful questioning’, there are many types of questions, with different characteristics and formats you can choose from.

The following chart offers a comparison of three question types. These illustrate the point that some types of questions will elicit useful information for your reference in improving governance, while others will not.

Evaluating how directors add value

In a previous post, I mentioned the three questions Deloitte suggest directors need to ask as they seek to add value via their governance role:

  • What can we do more of (e.g. new capabilities, increased capacity)?
  • What can we do better (e.g. quality, speed, agility, cost reduction)? and
  • What should we do differently (e.g. engagement, creativity, innovation)?

Versions of these questions should be posed at every board meeting if directors are to be effective in adding value. The evaluation of board effectiveness will hopefully provide an opportunity for reflection on this aspect of director performance.

Necessary but not sufficient

The “necessary condition” rule (aka the “necessary but not sufficient” rule), can be applied to the concepts of efficiency and effectiveness, as well as conformance and performance in organisational governance.

Efficiency and Effectiveness: Efficiency refers to the use of resources in the most economical way possible, while effectiveness refers to achieving the desired results.

In terms of organisational governance, efficiency is a necessary condition for achieving effectiveness, but it is not sufficient. For example, an organisation may be efficient in its use of resources, but if it is not achieving its desired results, it is not effective. Therefore, the board needs to focus on both efficiency and effectiveness to govern properly.

Conformance and Performance: Conformance refers to compliance with rules, regulations, and standards, while performance refers to achieving goals and objectives.

Conformance is a necessary condition for good performance, but it is not sufficient. For example, an organisation may be fully compliant, but if it is not achieving its goals and objectives, it is not performing well. Therefore, the board needs to focus on both conformance and performance to ensure that the organisation is successful.

Operational and Strategic Management: Operational management is necessary for service delivery, but without strategic management, the organisation could become irrelevant (if it locks in on ‘the way we’ve always done things’, and fails to adequately respond to changing stakeholder needs). Continuous attention to the quality of both, jointly and separately, helps to ensure organisational effectiveness.

Resource Links

For those interested in reading further about board effectiveness and evaluation, a pdf containing a selection of links to online resources is included in the ‘See also’ section below. Smaller organisations looking for template questionnaires or surveys may wish to review and adapt some of the examples included in this file. These examples include both free and commercial options.

To be continued …

Part 4 will continue this series by revisiting the governance frameworks within which board effectiveness evaluations are conducted.

See also:
A question of skillful questioning
How effective is your board? – Part 1 How effective is your board? – Part 2