Annual board self-evaluations have long been considered a best practice, with the idea that measuring board performance leads to continuous improvement in governance. But according to PwC’s annual directors’ survey, more than half of boards make no changes based on board evaluation results. Meanwhile, 35% of directors said at least one director should be removed from the board, for reasons including “arriving unprepared to meetings,” or incompetence in the role. A disconnect exists between what we want board evaluations to achieve, and what they actually do. Join us for this session to explore the reasons why board evaluations often fail to actually improve board performance. We'll discuss issues such as: • Common flaws in board evaluation requirements issued by regulators • Why fixing the process isn’t as simple as finding a better questionnaire • How most board evaluation processes impede change We'll provide simple strategies and tools that can help evolve your board’s evaluation process from a "check the box" exercise, to an engine for creating continuous improvement. To register, please complete the form below. Can't make the scheduled time? Register anyway and we'll send you the replay!

1. ©2017, BoardEffect LLC 1
Why Board Evaluations Often Fail
and What To Do About It!
Gulf Coast Community Foundation
Presented by Dottie Schindlinger, BoardEffect
Moderated by Wendy Deming, GCCF
October 11, 2017
12:00 PM EDT

2. ©2017, BoardEffect LLC
Housekeeping
 Session will be recorded
 All lines are muted
 60 minute session with time for Q&A
 Send questions to Q&A box on Zoom control panel
 Slides and recording will be emailed after
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3. ©2017, BoardEffect LLC
Presenter:
Dottie Schindlinger
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 VP & Governance Technology
Evangelist
 Member of BoardEffect’s
founding team
 Thought leader on governance &
technology topics
 Learn more at
linkedin.com/in/dschindlinger

4. ©2017, BoardEffect LLC 4
Secure, cloud-based board
management software
that drives board
efficiency, effectiveness
& engagement
What Is
?
Optimizing
Resources
Enhancing Board
Operations
Improving the Board
Member’s Experience

5. ©2017, BoardEffect LLC
Today’s Agenda
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Overview of board evaluations –
approaches, processes, flaws
Discuss the reasons board evaluations
aren’t meeting their objectives
Suggest strategies to improve
board evaluation outcomes

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Types of Board Evaluations
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Peer-to-Peer
Assessments
Individual Self-
Assessments
Full Board Self-
Assessments

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Full Board Self-Assessments
Questionnaire
length varies
Responses kept
confidential
Aggregate results shared
with full board or a
committee
Few guidelines on required
criteria or questions
Track board performance
over time (+/-)
Results tend to skew
high overall

8. ©2017, BoardEffect LLC
Individual Self-Assessments
Results skewed by
individual self-biases
Less common than full
board assessments
Identify areas for
improvement and get
support for directors’
development
Not usually
anonymous, but
confidential
Lead by a committee,
action plan developed
with the director
Not typically required
by regulators
Questionnaires include
more open-ended
questions
Conducted
sporadically

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Peer-to-Peer Assessments
Must be anonymous
Identifies and addresses
individual performance
issues
Conducted very
sporadically
Questionnaires
are short
Aggregate results confidential;
individual results shared with
director
Results could skew high if
anonymity is in doubt

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QUICK POLL!
What does your
organization do?
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Who conducts board evaluations?
 Only 45% of nonprofits w/in last 2 years
» BoardSource: Leading with Intent: 2017 National Index of
Nonprofit Board Practices
 90% of public companies
– Only 41% assess individual director performance
» NACD: 2016-2017 Public Company Governance Survey
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Why board evaluations?
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 Considered a best practice
 Required by some regulators
 Opportunity for board reflection
 Helps establish board priorities
 Accountability to stakeholders
 Should create continuous
improvement

13. ©2017, BoardEffect LLC
Do Board Evaluations Matter?
In Corporate Boards:
 51% made no changes based on evaluations
 35% say a director should be removed:
– “Unprepared for meetings” (25%)
– “Does not have required expertise” (17%)
 6 in 10 added a new director; reasons:
– Needed additional skill sets
– Investor pressure
» PwC: 2016 Corporate Directors Survey
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14. ©2017, BoardEffect LLC
Do Board Evaluations Matter? Part 2…
 Nonprofit boards that evaluate score higher on
core responsibilities, including:
– Evaluating the chief executive
– Adopting and following a strategic plan
– Monitoring organizational performance and impact
against strategic plan goals
– Understanding board roles and responsibilities
» BoardSource: Leading with Intent: 2017 National Index of
Nonprofit Board Practices
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15. ©2017, BoardEffect LLC 15
APATHY LACK OF PRIVACY BAD PROCESS HOPELESSNESS
“We don’t want to rock
the boat.”
“Candor can have
consequences.”
“This is too
cumbersome.”
“It doesn’t lead to any
changes anyway.”
“If it’s not required, why
bother?”
“Everyone will know it
was me who said that.”
“Responses have to be
chased down.”
“We never discuss the
real problems.”
“We don’t have problems,
we can skip it.”
“Tell me who said that
about me.”
“Does anyone have a
better template?”
“Every year we do
something different.”
Where’s the Disconnect?

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Solution: Fix the Process
 Use technology to streamline distribution/collection of questionnaires, and to
keep the responses completely anonymous.
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Solution: Discuss the Results
 Bring the anonymous results in aggregate to the board for consideration.
 Identify common themes, call them out, discuss possible improvements.
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Solution: Anonymous Peer Reviews
 Directors review individual director performance – including their own.
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 Establish board job
performance criteria
 Create a set of core
competencies & skill
sets for directors
 Create a profile matrix
for the board
 Board development
includes recruitment,
orientation, education &
evaluation
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Governance Committee Role

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How Will You Use What You’ve Learned?
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Identification Knowledge Execution
Areas of Focus
Development Opp’s
Potential Obstacles
Shared Learning
Group Discussion
Evaluation Tools
Governance Committee
Implement Process
Use Results

21. ©2017, BoardEffect LLC©2017, BoardEffect LLC
Contact Me!
dottie@boardeffect.com