In contrast the board’s responsibility is joint and shared. Managers have individual accountability as well as collegiate accountability. However, it is essential that board evaluations recognise the significant differences between the accountabilities and responsibilities of board members and executive managers. Novices to the evaluation process could find it confronting to embark on a detailed process that involved questionnaires and critical appraisal from senior management. The methodology could vary, for instance, depending on whether a company has conducted an evaluation previously or not. Feedback from directors and chairmen concludes that the best evaluations are those that are tailored to a company’s specific circumstances. An essential element of any performance review is for boards to actively choose an evaluation process that best suits their needs. The issue these days is not whether to evaluate a board’s performance, rather it is what kind of evaluation approach best enhances board effectiveness. So AICD has come out with some guidelines to help companies do it better.” We’ve found a high level of compliance with the notion of having a board evaluation, but in surveys of director satisfaction with the process, we’ve found less than fulsome satisfaction with how it’s been done. Graham Bradley, chairman of Stockland Group Ltd and a member of the AICD’s corporate governance committee observes that: “A couple of years ago when the ASX Corporate Governance Council’s (ASX CGC) Principles of Good Corporate Governance and Best Practice Recommendations (ASX CGC Principles) were introduced, board evaluation was a new concept for a lot of boards. But not so long ago many directors considered that reviewing a board’s performance was unnecessary and irrelevant. Regular evaluation of a board’s performance is now considered an integral part of effective corporate governance.
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