Evaluating the Individual Director

This is the third in a series of four Savvy Director articles dealing with various aspects of board and director evaluation. The first two articles in the series, “From Compliance to Improvement” and “From Evaluation to Action,” explored the board evaluation process. The fourth will deal with meeting evaluations.

We’ve spent the last two Savvy Director articles delving into the process of evaluating the board of directors – looking at areas such as governance, performance, oversight, dynamics, and engagement. The focus of these evaluations is the effectiveness of the board as a whole, with an eye to continuous improvement of how the board operates and governs the organization.

But, when you stop to think about it, a board of directors is a group of individuals working together. It stands to reason that the effectiveness of the board as a whole depends at least somewhat on the performance of each individual. So, should a really robust board evaluation include an assessment of the individual directors as well?

Many people think the answer to that question is a resounding YES. That’s where individual director evaluations come in.

Using Individual Director Evaluations

“Even if the Board Chair is doing an outstanding job [in addressing director performance], there’s nothing wrong with supplementing the Chair’s efforts with a structured process to solicit constructive feedback from all board members every three years or so.” – Beverly A. Behan, author of Board and Director Evaluations: Innovations for 21st Century Governance Committees

The use of individual director evaluations is on the increase, although it is still not a widespread practice. Boards are using either self-evaluations (where directors evaluate their own performance) or peer evaluations (where directors evaluate each other) or both.

Individual evaluations can improve a board evaluation process, especially one that is already generally successful. When done thoughtfully, director evaluations offer constructive feedback to improve performance. If the directors on your board are comfortable with board evaluations, they might be ready to consider the potential value that individual evaluations offer.

Or maybe not.

In my experience, directors who may appreciate the value of individual evaluations in theory, are still reluctant to undergo them in practice. Let’s face it. This kind of assessment requires directors to ask and answer difficult questions about themselves and their colleagues. As a result, many are hesitant.

And their boards are concerned that candid feedback, even if it’s constructive (which it might not be!), may put directors on the defensive and undermine board culture.

This kind of concern can make it difficult when you first broach the topic of director evaluations. But it becomes easier over time, especially if new directors are introduced to the concept during their onboarding. If expectations about director assessment are set during the orientation process, then directors know that performance evaluations are part of the board culture and they won’t be surprised by the prospect.

Self-Evaluations

If your board is hesitant to move on from board evaluations to individual evaluations, it might be a good idea to start slow, take an incremental approach, and gradually build up people’s comfort level with the idea. That makes self-assessment an ideal way to get started.

Self-assessments provide directors with an opportunity to reflect on their own performance. The goal is to enable directors to consider and determine for themselves what they can proactively do to improve personal performance and better contribute to their board. The self-assessment is kept private – it isn’t shared with anyone else.

Self-evaluations call for a healthy dose of self-awareness and introspection – not necessarily a strength for every director. Still, I found it interesting to learn that simply asking themselves relevant questions about performance can lead directors to work more effectively.

It’s not difficult to find self-evaluation forms on the internet, especially ones designed for use by non-profit organizations. This Form to Evaluate an Individual Board Member from The Center for Nonprofit Leadership at Adelphi University School of Social Work is a good example. Or DirectorPrep’s own Individual Director Self-Evaluation is an approach you might consider – it’s designed around our Savvy Director framework.

Self-assessments are helpful and non-threatening, but of course they have shortcomings – the most obvious of which is that they offer only one perspective, and a biased one at that. Individuals often see their own performance quite differently from the way others see it. Some people are really tough on themselves and rarely give themselves an excellent rating, while others see few if any flaws within themselves.

That’s why, once directors become comfortable with the idea of individual evaluations, boards often consider moving to the next step – peer evaluations.

Peer Evaluations

Those outside the boardroom are fans of peer evaluations, but the view from inside the boardroom looks a little different. Directors understand that peer assessment can be valuable, but they also know that it can create havoc if handled badly. That’s why proposing peer reviews can make some directors deeply uncomfortable.

It’s important to introduce the idea of peer evaluations carefully, appreciating that some directors may be resistant. Peer evaluations can be uncomfortable, but where board dynamics are healthy, directors can come to see peer evaluation as important and useful guidance from their esteemed colleagues.

There is one board member who is more likely to be a fan of peer evaluations, and that’s the board chair. That’s because the onus is on the chair to provide directors with performance feedback. With peer evaluations, that feedback is based on the collective and anonymous input of other board members instead of just their personal opinion.

Peer evaluations are not suitable for every board. If the board isn’t already conducting regular board evaluations, putting that process in place first will yield more valuable, actionable results. Only when evaluation has become part of the board culture, should peer reviews be considered.

Also, if many of the directors on the board are relatively new, they won’t have had the time to get to know one another well enough to provide constructive feedback. In this case it would be best to defer peer evaluations for the time being.

Getting the Most from Peer Evaluations

“Many boards only consider director evaluations when they have a ‘problem director.’ … But director evaluations can and should be so much more.” – Beverly A. Behan

Clear objectives go a long way to producing valuable insights without damaging boardroom dynamics. The most obvious objective is simply to provide directors with feedback that identifies areas where they might be able to improve their contributions to the board.

But, many times, boards look to peer evaluations as a way to deal with an under-performing director, not only by providing the board chair with input from the entire board to help confirm (or refute) their concerns, but sometimes to identify under-performing directors to the nominating committee for their consideration in the re-nomination process.

Of course, maintaining confidentiality throughout the process is key, and that is why most boards engage a third party. When it comes to providing input about their colleagues’ performance, directors are more apt to be direct, open, and candid with an external party than with their board chair or another director.

Available formats include ratings, questionnaires, skills-matrix charts, or written questions, but interviews provide the richest source of valuable feedback. Interviews may start with a script, but a skilled interviewer can ask questions that encourage directors to open up, and pose follow-up questions like, “Can you give me an example?” or “Help me understand what you mean by that.”

Sharing Feedback

“A really worthwhile director evaluation should provide all board members with meaningful and genuinely insightful feedback. Reinforcing the strengths and contributions of your board room stars can be every bit as important in board-building as censuring the under-performers.” – Beverly A. Behan

Determining how the feedback will be shared has to be decided at the outset. Will the feedback be shared with the board chair and/or nominating committee, or will it be provided only to each individual director? To a certain extent, the objectives of the exercise drive this decision, but there are other factors to consider as well.

When a board embarks on director evaluations for the first time, it might want to limit the feedback exclusively to the individual directors themselves to help alleviate some of the discomfort. This approach automatically ensures that the evaluation can be used only for directors’ performance improvement, not for decisions about whether or not a “problem director” will stay on the board.

But if the director evaluations are to be used in re-nomination decisions, then obviously the results will have to be shared with the board chair and/or nominating committee. By the way, there’s little to be gained in sharing the reports with the full board – that’s just awkward and uncomfortable for everybody.

The third party advisor summarizes and presents the feedback in a way that it can’t be traced back to the source. To be effective, the feedback must be specific and constructive. Moreover, it should be balanced, meaning that all directors receive both positive feedback to reinforce their strengths and advice on where they could be more effective.

Holding individual meetings to walk through the results works better than simply sending out written reports. Meetings – whether with the external facilitator or the board chair - allow for questions, clarification, and challenge.

And when it comes to individual evaluations, a formal action planning step is really not necessary. Having received their feedback, most directors understand exactly what they need to do without creating a written action plan. (Hint: it usually involves changing their behavior in some way.)

Evaluation Dimensions

The most valuable question to ask may very well be, “What one thing could this director do to take their board performance to a higher level?”

So, what exactly are directors evaluated on? That depends on the objectives that the board has decided on. Still, there’s a fair amount of commonality from one board to the next - a set of dimensions that describe what is expected from every effective director.

Here are the most common dimensions as well as a few sample questions. Keep in mind that, during an interview, closed questions would be followed up with a request for an example or further elaboration.

Understanding the business:

• Does X have a good understanding of company strategy, financials, and operating issues?
• How well does X remain current about the industry?

Time commitment and meeting preparation:

• Does X come fully prepared to meetings?
• Does X devote enough time to be an effective board member?

Value:

• Is X a key contributor to board discussions with strategic value?
• How is the board better off because of X’s contributions?

Interpersonal skills:

• Does X listen to and weigh the input of others?
• Does X pose valuable questions?
• Does X speak their mind constructively even if their views differ from others?

Ideas for becoming more effective:

• Does X offer constructive and realistic ways for the board to improve?
• Does X offer innovative ideas and solutions?

Integrity:

• Is X able to keep the information they receive confidential?
• Does X demonstrate objective, fair, and ethical behaviour?

Your takeaways:

• If your board is new to individual director evaluations, consider starting with self-assessments.
• Peer reviews aren’t suitable for all boards - those with several new members or without a board evaluation process may want to wait.
• With peer assessments, be clear about the objectives and design the process to reflect them.
• Ensure that the feedback is kept confidential and that it’s focused on improving director performance.

Resources:

• Board and Director Evaluations: Innovations for 21st Century Governance Committees. Beverly A. Behan. © 2021 Board Advisor, LLC. (Specifically Chapter Four “Director Evaluations that are Genuinely Worthwhile.”)
• “How do you like me so far?” Alice Sayant. The Savvy Director. February 2020.
• 4 Steps to Effective Peer Evaluations. Rasmus Hallgren. BoardClic. July 2021.
• Directors’ Dilemma: What are the pros and cons of board peer evaluations? Heather Wilson. ICD Director Journal. January-February 2019.
• Is Your Board Ready For Peer Evaluations? Karen Bohn and Sandra Davis, Ph.D. Corporate Board. January/February 2016.

Thank you.

Scott

Scott Baldwin is a certified corporate director (ICD.D) and co-founder of DirectorPrep.com – an online hub with hundreds of guideline questions and resources to help directors prepare for their board role.

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