Assessing or evaluating board of director performance in the nonprofit/charitable sector is not a common practice, however there is a growing expectation from the public, stakeholders and donors – echoed in recent media reports about failed governance – boards should develop a formal process.
Having an assessment policy and process are elements of good governance and promote confidence with executive management, donors and stakeholders. It has been my experience, director reluctance to evaluate board performance often relate to three common themes: misunderstanding the benefits, believing fellow members would not welcome the review and the evaluation process would take too much time away from board priorities.
To encourage the nonprofit board of directors to adopt a process I suggest there are 15 key benefits. The list below serves as a jumping off points for a board of directors to consider.
15 Benefits of Assessing Board Performance
- Helps to maintain board strategy and management plan alignment with organization mission
- Provides clarity of roles, mandate and accountabilities of the board and its committees (e.g. alignment with governance mandates, committment summaries)
- Assessment of appropriate director engagement during tenure (e.g. participation levels, team effectiveness, skill application, NIFO)
- Provides identification to resolve key and emerging issues
- Allows for timely review of committee structure, effectiveness and outcomes
- Assesses potential individual or board conflict of interest
- Addresses any possible negative behavior or influence by individual(s) or group(s) (e.g. committee, stakeholder, donor, entity)
- Provides timely review of critical metrics or key performance measures (e.g. attendance, donations, goal attainment)
- Identifies potential problems related to funding and donor stewardship
- Identifies weaknesses in oversight of mitigating risk and financial reporting
- Provides insight into board leadership issues (e.g. group dynamics, NIFO)
- Aids in recruitment and succession strategy and planning (e.g. nominations processes)
- Provides board member skill assesssment/review for current and future governance
- Identities possible gaps with management performance and relationship with the board
- Aids the Chair assessment (See post: “Do You Have The Right Board Chair?”)
Executing regular assessments will demonstrate the shared value the board of directors and management place on continuous improvement and performance outcomes at every level of the organization.
In an upcoming post I will share my thoughts on tools and techniques for the board of director assessment. If you would like to share your thoughts and ideas on assessing board performance please reply.