How good is your governance?
February 17, 2014 The NonProfit Times
Is your organization getting everything it needs from its board? If you don’t think so, or even if you do, it’s time to start doing a board assessment.
A board assessment’s aim is to evaluate the performance of the board as a whole. Its purpose is to evaluate the effectiveness of the board in fulfilling its governance duties to a variety of areas. In his book “Making a Difference, Howard Berman defines these areas as:
- Assuring the enterprise’s pursuit of its purpose;
- Approving policy and strategy;
- Monitoring performance processes and results;
- Adding value to the organization; and,
- Assuring continuous improvement in the performance of management and the board.
Berman wrote that any good board assessment should also include an analysis of processes, structures, and outcomes. A process assessment looks at what the board does and how it works. A structure assessment considers “things,” as opposed to activities. This can include, for example:
- A forward agenda;
- A conflict of interest policy and program;
- A code of conduct;
- Adequate meeting facilities;
- Regular executive sessions; and,
- Regular chief executive communications.
Finally, Berman provides examples for analyzing objective factors. Did the board or a designated committee:
- Review and approve the enterprise’s strategy and operating plan;
- Monitor actual performance against operating plan objectives;
- Conduct an annual chief executive performance assessment;
- Review and approve conflict of interest declarations;
- Meet with the independent auditors; and,
- Review and approve the code of conduct?