The best new alternative to an in-house board review

Board review | Board Benchmarking

Most boards typically conduct in-house board reviews. Larger organisations may opt for externally facilitated, in-depth board assessments in the years between such internal evaluations. In contrast, numerous smaller organisations having never done an externally facilitated board review, often solely rely on internal reviews at agreed intervals.

Numerous organisations have yet to conduct any form of review regarding the performance and effectiveness of their board. Hopefully, this number of boards is diminishing!

Most board reviews are done by way of a board survey

Board reviews, typically conducted in-house, commonly rely on the administration of a board survey of their directors. Some organisations extend their assessment to include the perspectives of executives who frequently participate in board meetings, which is recommended.

The board survey is invariably focused on the effectiveness of the board as a whole. In certain cases, boards go further by incorporating a self and/or peer-review survey to assess the individual effectiveness of directors. While less common, some boards also include an examination of the effectiveness of board committees in their survey.

The responsibility of formulating the survey statements for the board survey often falls on the Company Secretary. Frequently, they will undertake the task of cobbling together survey statements from different templates and surveys available online, and/or make up their own.

Company secretaries then often use ineffective tools to compile reports

Once the survey statements are finalised, the Company Secretary will collect the data using Survey Monkey or another minimal survey data collection tool.

Following completion of the data collection phase, the Company Secretary proceeds to compile a report for the Chair and the board. This report outlines the responses from directors plus any executives to each survey statement, a task often involving the manual transfer of data and/or charts into a report, which is prone to error.

Within the report, the Company Secretary will often include their calculation of the average response to each survey statement and take other steps to protect the anonymity of individual directors.

If the same survey was used previously, comparable figures might also be included, introducing further risks of transcription errors and inaccuracies. The compilation of the report, a time-consuming and low-value administrative function, remains a responsibility of the Company Secretarial team.

The report to the board is often misinterpreted

The board frequently makes conclusions about its effectiveness based on the average response ratings of survey items, assuming superior performance in areas with high ratings and inferior performance in those with low ratings. Often this might be explicitly stated by the Company Secretary, the chair or another director.

However, this assumption often can lead to a misinterpretation of the survey report. The challenge lies in the fact that some survey statements are much easier to agree with than others. A high average response to survey items that everyone finds easy to give a high rating doesn’t necessarily indicate the board’s competence in that area. Nor does it imply superiority in comparison to areas where the average response was lower.

Any written comments regarding strengths and suggestions for improvement will often be included in a survey and added to the report verbatim.

Limitations of in-house board reviews

In-house board reviews main drawbacks are:

Incomplete coverage of key areas: The survey items chosen to be included in the in-house board survey often don’t include all the areas necessary to assess a board’s effectiveness are not tried and tested and lack validity.

Reserved responses: Survey respondents will often not provide candid responses. They will often temper their survey ratings and written responses as they are not sure who might end up seeing their responses.

Resource-intensive process: The process is quite time-consuming for the Company Secretary and their team and is prone to error.

Potential for misinterpretation: The report will most often be misinterpreted for the reasons stated above.

Lack of benchmarking: There is no benchmarking to show the board how it compares with boards of organisations in a similar sector and industry and of a similar size.

Historically, there have not been any viable alternatives to carry out an internal board survey and external board surveys were often deemed cost-prohibitive, with very few providing robust benchmarking against comparable boards. Until now.

The best new alternative

Board Benchmarking and its sister brand, Board Surveys, have disrupted the board review marketplace by introducing four affordable fit-for-purpose board surveys. Regardless, of your board’s sector, industry or size, there will be one that will suit you. Moreover, we offer benchmarking against a diverse pool of 500 boards representing various sectors, industries and sizes to be benchmarked against.

Pricing starts as low as AUD 1,425 for the shortest fit-for-purpose survey, designed for smaller organisations and not-for-profits. Even for the very largest organisation, the price remains competitive at only AUD 6,750. The inclusive pricing covers the provision of a benchmarked report directly to the Chair or another nominated party.

To determine, the most suitable survey for your board, click here to explore the number of survey factors and statements included in each of the four surveys.

The era of Company Secretaries investing time and effort in conducting in-house board surveys and preparing a non-benchmarked report for their board is now outdated.

Board Benchmarking and Board Surveys both have a shortened FREE Trial version of their surveys that can be completed by individuals. Upon completion, a free benchmarked report is provided immediately.

Comparative analysis: In-house board survey vs externally facilitated board surveys

In-house board survey vs externally facilitated board surveys Board Benchmarking Board Surveys

Talk to an expert today

Contact us to find out more about Board Benchmarking’s solutions. Alternatively, click here to view our pricing options.

Subscribe to our insights

Get our latest insights and research delivered straight to your inbox.