Governance Pro Featured in Boardroom Insider November 2021BOARD EVALUATION -- 6 NEW ONLINE TRENDS
Board evaluation has become an important corporate governance duty over the past decade, not only a good governance idea, but increasingly required for various sectors and in many world regulatory systems. But is your board assessment process keeping up with the times? New electronic tools have made online evaluation far simpler, quicker and more objective than traditional paper methods. Still, how do you evaluate board performance when your members today are meeting online from points all over the map?
The booming use of online board portal platforms has changed all aspects of boardsmanship, and that includes evaluation. Most of the popular portals (Diligent, BoardEffect, Boardvantage, etc.) include tools for evaluation, but these can vary in sophistication and value (here is an overview of the major portals.I have yet to find an online comparison of their evaluation capabilities). Portal tools for assessment include formatting and sending of questionnaires, compilation of results, and presenting them in handy tabular and graphic formats. Sounds pretty basic, but this alone makes the evaluation process easy and automatic enough to give an added prod to evaluate, the busywork handles itself.
Beyond the portals, there are a number of specialized tools offered by software providers and consultants specially designed for board assessment. A few popular resources are Rivel, QDiligence and GovernancePro. These deliver more depth and customization to the online governance process, as well as interpretation and advice on the results.
Consensus suggests that electronic board evaluation tech benefits the process the way most digital tools add value by making the busywork easier, while leaving more time for personal assessment of the results. I do not believe the data should be the final takeaway, says David Bobker, a managing director with Rivel. But it helps establish benchmarks and objectivity. Once the data is processed and presented, the board can then look to engage for the live part of the evaluation through video conferencing. ALSO, devote advance facetime discussion to planning the evaluation goals, priorities and leadership, what and why do you want to evaluate? (EY offers a good online guide for this). Use the E-tools to save time and effort in the scut work middle third of your process -- data gathering and digestion.
The use of tech tools for board evaluation also makes it easier for outside advisors to assist. Aside from the sources noted above, law firms, accountants and management consultants find that online evaluation tech makes their role more valuable as a processor and counselor. Independent consultants are starting to use this to enhance their evaluation practices, says Russell Maher, president of QDiligence. Though tech (especially the board portals) makes do it yourself evaluation easier, it is still wisest to engage an outside advisor to lead and manage the process. The result is greater objectivity, more willingness by participants to open up, and added insight on interpretation. (However, Maher notes that 85% of boards are still doing it themselves.)
A less noted payoff of using online board evaluation, greater security. Whatever type of technology you use, make sure it is secure, cautions Ray Bauschke, founder of GovernancePro. Too often the evaluation is being discussed over Skype or Zoom. Portals and the dedicated platforms above fuss over info security, but that only works for the data going in or out. Once members of your board start discussing the findings online, the chances of sensitive thoughts or data being leaked, going astray, or forwarded to careless hands spikes.
Ever since tractors took over for farmers draft horses, technology has not only made previous tasks easier, but created whole new applications no one thought of before. This applies to board evaluation platforms. If the tech really simplifies the process so much, who says you have to limit evaluations to every year or two? Why not more frequent status checks? Or, beside formal evaluations, how about live polling of board, committee or chair performing at every meeting.
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