BoardWise offers an affordable, valuable board evaluation service, called BoardScan. It holds an exclusive license for its best-of-breed board evaluation software tools. These reliable, secure, online tools are used for compliance evaluation and to measure the impact of governance practices on corporate performance and reputation. The evaluation is strictly confidential and the findings are reviewed by only the board of directors.
The evaluation system is a SaaS, on-demand software method. The advantage is that is it not people- intensive, without consultancy billing hours. Thus, a company can spend far less annually for fully compliant, global data and a private review of findings and recommendations by seasoned governance experts, rather than the traditional premium fees a year from consulting and executive search firms that offer limited analyses.
In many countries – including the US and European nations – it is mandatory for companies to conduct annual board evaluations to meet stock exchange listing requirements and national and banking code regulations. In most other countries - including China – it is recommended as a best practice. If your company registers entities outside of its country headquarters, it must comply with the evaluation requirements within that country. Further, recent regulations require companies to disclose specific content in their proxy filings related to data from these annual evaluations. Most recently, institutional investors make it a condition of investment that the company upholds this practice.
Conducting annual evaluations is considered a best practice for all companies. Smart public and private companies worldwide monitor their board performance through a discipline of candid self-assessment. Regular board evaluation correlates positively with improved board contributions in key areas, including clearer strategy, more competitive corporate performance, CEO succession and improved risk oversight, according to the National Association of Corporate Directors.
For a review of the range of approaches to board evaluations, see our published article: Board Evaluations: From Bogus to Brilliant.
A formal, objective board evaluation process can help a board:
Further, a solid evaluation can improve board group dynamics.A challenge many boards face is how to work effectively as a team, when each individual’s styles can be so different. Based on global research with more than 10,000 executives and directors, BoardWise designed the Board Style Indicator© tool to assist boards with how to optimize team effectiveness. Individual directors complete a 20-minute confidential, online self-assessment that helps them understand their own unique board style and how to strengthen their overall effectiveness within a board. Based on the combination of styles within a full board, the modeling also evaluates the overall pattern of styles represented within a board and addresses how to improve group balance, committee and board leadership and effective board performance.
This assessment is particularly valuable for: 1) newly formed boards to quickly understand how to work well together by leveraging known strengths, 2) boards looking for ideal succession candidates who will balance out existing board members’ styles, 3) boards in mergers or acquisitions that must recompose committees based on new combinations of talent.
Members of credit associations, e.g., the Shanghai Services Trade Association will incorporate in their credit assessment whether companies complete an annual board evaluation each year. Those companies which do will receive acknowledgement in their credit rating assessment. Further, companies will receive a governance rating score, based on their engagement to improve their overall governance. Members who participate in the annual board evaluation process will receive a higher credit rating, based on their commitment to governance improvement standards.