Governance consultation Canada can help companies comply with the country’s corporate governance law. Boards are required to state in annual reports how the performance evaluation of the board, its individual directors and its committees have been conducted. Performance evaluations should also be externally facilitated. Board evaluations help boards identify and overcome the barrier that hinders their effectiveness. This also shows the organization that board members are dedicated to what they’re doing.
External facilitation helps them compare the performance of a board to other comparator boards. An external facilitator can add an external perspective that a board wouldn’t have been able to access if they did the evaluation on their own. Board evaluations Canada can help determine areas of weakness and strengths, allowing organizations to make the necessary changes that will positively impact shareholder value and board performance. An external facilitator can give objective and independent advice. The facilitator should have a successful track record. He or she should be an expert in board evaluations. Look for references before hiring anyone and avoid conflicts of interest when looking for an external facilitator.
Board evaluations can help organizations address certain issues, ensure that the board is doing its best and benchmark performance against other corporations. It’s important to determine the evaluation’s scope and whether it extends to individual directors and board committees as it affects overall governance within an organization.
How Are Board Evaluations Done?
The option depends on the current cycle of the organization and what they want to get from the evaluation. For instance, organizations can conduct DIY questions or self-assessment through external software solutions. They can also facilitate self-assessments and bring in an external third party provider to provide an independent report or conduct an independent assessment of the entire board. The results from the board evaluations Canada can be used to implement process changes and initiate group discussions. For example, basic management principles can be implemented to develop action plans with definite timelines to execute and monitor the evaluation recommendations.
The board should disclose to the investors why a board evaluation was conducted and what was reviewed during the assessment and who conducted the evaluation and the reason behind the selection. They should also reveal the nature of the board evaluation process, the key findings, and the necessary follow-up action. Investors can anticipate what outcomes will arise from the evaluation.
Governance consultation Canada can help boards learn how to run the board efficiently and effectively. Members should be able to put their own perception forward and disagree from time to time even if their perspective is contrary to what the majority think. One of the most common reasons why some boards are less successful is because members didn’t feel that they are free to speak up. Board evaluations Canada can help organizations check if members feel that they could say what’s on their mind. High performing boards don’t just conduct annual board evaluations. They also develop other tools to guarantee continuous performance improvement.