individual director assessments - leading or lagging
TRANSCRIPT
Director Assessments
LEADING OR LAGGINGJanuary 26, 2017
Session Objectives•Address risks•Practical insights•Process options• Identify benefits•Encourage leadership
Perspectives on Performance• Lack of meaningful accountability
• Lack of appetite• Director double-standards
• Culture of individualism• Motivation to be a director• Recruitment focused on experience
Story: Boardroom “Bully”
Case for Assessments
Most important corporate governance requirement is director quality.
• Integrity• Competencies • Motivation
• Canadian Coalition for Good Governance
Case for Assessments• Canadian Coalition for Good
Governance • Director performance to be assessed
annually using peer-review survey
• Treasury Board • Develop annual process to evaluate
Director effectiveness
Key Success Factors• Director commitment & engagement
• Time and thought
• Support objectives
• Contribute to success
• Act on results
• Rigorous, customized assessment
• Timely, practical, relevant feedback
Effective AssessmentsAssessment process should be…
Comparative Benchmark objective criteriaConvenient Time is a precious commodity Constructive Affirm strengths; identify
opportunities for improvementComprehensive Assess relevant criteriaConfidential Ensure candour and
commitment
Director Effectiveness
Competence+
Contribution+
Character
Effective AssessmentsEstablish benchmarks
• Avoid personal opinion/biases
• Need objective criteria• Established expectations, values, etc.
• Use behavioral descriptors
• Focus on key director accountabilities, deliverables and success factors
Effective Assessments
• Assessment design• Objectives /
motivation• Process design
• Training / education
• Collect data with rigour, objectivity:• Surveys• Interviews• Observation
Process Steps
Feedback and Coaching
Effective Assessments
Managing the Process•Various options
• Board Chair
• Corporate Secretary
• External Consultant
•All valid for different reasons
•Circumstances/culture determining factors
Effective AssessmentsRecommended Objectives•Performance expectation clarity
•Promote contribution consistency
•Identify strengths, improvement opportunities
•Support Directors to achieve success
•Promote accountability to act on findings
•Model leadership for management
Effective Assessments
Key Benefits•Help directors maximize contribution
• Assess personal strengths, weaknesses
• Determine education needs
• Facilitate board succession planning
Effective Assessments
Director evaluation models•Self-evaluation
•Peer-to-peer
•Hybrid / customize• Align with appetite / culture
• Add rigor over time
Effective Assessments
Process considerations•Who owns the process?
•Who will manage the process?
•How will confidentiality be ensured?
•How will results be reported?
•What accountability for acting on results?
Effective Assessments
Issues and challenges•How results will be used
•Discoverable for use in litigation
•Fear of settling scores
•Directors opting out
•Addressing non-performing directors
Effective Assessments
Issues and challenges•Factoring differing director competence and experience
•Accountability for acting on results
•Comfort assessing peer directors
QUESTIONS AND
COMMENTS
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