|
 |
|||||||
|
|
|
|
|||||||||||||||||
|
|||||||||||||||||||
|
|
|||
|
Feature
Yes, it’s sensitive, but the practice can provide great value to individual directors and the board as a whole. Although the practice can take a variety of forms, most boards are adhering to NYSE guidelines and are conducting an annual performance evaluation of the overall effectiveness of the board. Few, however, are venturing into the highly sensitive area of peer evaluation. Those that take the risk and do so in a thoughtful and constructive manner find that “seeing ourselves as others see us” can be a highly productive process. It is often said that the higher one goes in an organization, the less direct performance-related feedback one receives. This is particularly true in the often-rarified air of the boardroom, where direct feedback is seen as either unnecessary or potentially destructive to the culture of collegiality. Yes, it is true that most board members are highly capable individuals who are motivated to be as effective as they can be in exercising their fiduciary responsibilities. Nevertheless, there are some board members who have served past their time and should retire, and there are some otherwise capable board members whose stellar performance is marred by a few small things that interfere with their overall effectiveness. On the other side of the coin, there are highly regarded board members who need to be encouraged to play an even stronger role in board deliberations. A Variety of Ways to Proceed A peer evaluation process can take many forms. At one end of the continuum, a process may simply involve a discussion of board members by the nominating and governance committee. At the other end of the continuum is a process that asks each director to evaluate in writing the performance and contributions of each peer. Whatever form the process takes, it is absolutely essential that at the beginning all board members understand who will see the results. Some boards choose to use an outside third party to compile summaries of the results for each board member “for their eyes only.” This approach assumes that each director will value the input from peers and will take whatever corrective action is necessary. Other boards have determined that in the spirit of the times, maximum value can be achieved with a transparent process involving full disclosure of the results to all board members. Some boards choose to develop elaborate questionnaires for use by members in evaluating their peers. Although such forms can ensure that all relevant aspects of director performance are considered, the process of completing a questionnaire for each individual board member can be burdensome. Answering Two Statements Other boards have found that significant value can be gained by simply asking each board member to respond to only two statements for each of their peers: • I value the following contributions (board member) makes as a member of the board. • I believe (board member) could provide additional value to the board by.... This simple format allows each board member to determine what is important to him or her (both plus and minus) in describing the performance of peers. Counting Up the Value Regardless of the method chosen, a peer evaluation process can provide value to individual members and to the board as a whole: • Each member receives very specific information concerning areas in which his or her contributions are valued by peers. Most people -- and board members are no exception -- want to be as effective as they can be, and receiving affirmation from valued colleagues can have a powerful impact. • Board members may receive clear information about behaviors that are not valued by their peers and can then take personal responsibility for determining what corrective action is required. • When all information is shared with all board members, it provides a clear message about what contributions are perceived to add value. If a number of directors are complimented for their financial insights, for example, it sends a good reminder to all board members that high levels of financial acumen will increase the effectiveness of the board. • The process can provide the nominating and governance committee with solid information upon which to base overall director development efforts, and can yield insights into skill sets that may need to be added to the board. In addition, if it is noted, for example, that several board members take up too much air time in meetings, making it difficult to adhere to the agenda, all board members can take note of this and take personal responsibility for managing their behavior, as well as encourage the chairman and/or lead director to play a stronger role in managing meetings. A Director’s Affirmation In its quest to be leading-edge in all issues of governance, the board of Invitrogen last year instituted a full assessment of individual directors similar to the one described above. Don Grimm, chairman of the nominating and corporate governance committee, noted: “The simple but powerful process of identifying how each member adds value and how that member can add additional value proved to be exceptionally meaningful in boosting our individual and our group’s ability to grow in our roles as active, passionate, inquisitive, and decisive directors. Our process was completely open, with each board member’s assessment shared with the entire group. The openness contributed greatly to enhancing our candor and our ability to deal with sensitive issues in a positive business fashion.” |
|||
| Robert
C. Muschewske is senior vice president, executive services, of
Personnel Decisions International (http://www.pdi-corp.com).
He has 35 years of experience in consulting with boards of directors
and top management on sensitive issues relating to the assessment,
development, coaching, and positioning of key executives. He can be
contacted at bobm@pdi-corp.com. Copyright © 2006 Directors & Boards, P.O. Box 41966 Philadelphia, PA 19101-1966. All rights reserved. Contact the webmaster. < Privacy Notice > |
||||
