Is the board doing their job?
We are now approaching the time of year where boards should be evaluated for their work and their competence. According to The Norwegian Corporate Governance Board (NUES), this is something that should be done annually. Good corporate governance strengthens the trust of the companies, and it contributes to increase value over time – which is of the best interest for the owners, the employees and other interests.
The board is central for further development and management of the company’s values, and as management of the strategic planning as a direction for the daily management. It is therefore essential for the company and its long-term values that the board possesses the relevant expertise and structure to exert its function in an effective manner.
There is a clear recommendation from NUES that the board evaluates the way it works, both individually and as a group, within the goals that is set for the control function. In line with good corporate governance, the board should use an independent player to assist with the evaluation. An external actor would provide security for an independent analysis and presentation of the results.
Visindi possesses many years of experience with leader- and board selections, and our experiences is that the things you are conscious about you can do something with, the things you are not conscious about will do something with you. In other words, the factors that you are not aware of could lead you in the wrong direction – consciousness gives the opportunity for proper choices that will lead to growth and development.
With a background in selection and development of leaders through many years, Visindi use an evaluation methodology that is customized the board. In collaboration with Associate Professor Janicke L. Rasmussen at the Norwegian Business School BI in Oslo and the Board Institute Inc., we have developed a methodology that we use in board evaluations with the purpose to increase the board’s consciousness and efficiency related to the expectations of the owners and other interests.
The first step is to prepare the board for the examination and the evaluation based on the corporate goals and frameworks. We will thereafter conduct the survey effectively in a way that it measures what it is supposed to measure. The results of the evaluation will be presented for the board. In order to ensure the board’s efficiency in the next period, we facilitate for the result to be subject for follow-ups in the form of appropriate actions.
The acknowledgement of such an evaluation may be that the current board does not possess the competence and skills that they should have to be able to lead the company’s strategic development in a good way. A necessary follow-up could be to plan how the board should acquire this expertise. Optionally should the composition of the board be a topic for the nomination committee. Visindi has long and broad experience with describing and understanding corporate situations and challenges, together with the competence that should be present in the board and management. An important area that often lacks focus is to assemble the board in a way that it covers a relevant and broad field of competence and that the board works in a way where this competence is benefited from.
Read more about board evaluation and board selection here: