“How wonderful would it be to see ourselves as others see us.” [1]

The overarching purpose of any board performance evaluation, in Board Matters’ experience, is to help board members individually, and collectively, be more effective decision-makers. Board evaluations continue to be a part of many board’s governance landscape and are often recommended by regulators (and some mandate them), despite boards often enshrining this annual process in their own governance policies. Irrespective of whether the evaluation is mandated or voluntary, the question for any board is then, ‘how does the board get value from this process?’

Although a board evaluation is often common practice, no matter the sector, a commitment to individual evaluations, or ‘peer-to-peer assessments’ lags. It has been commented that by expanding an evaluation program to include a sound peer evaluation process, can be an invaluable exercise to maximise the potential of nurturing the strengths and developing the oversight talents that sit at the board table.[2]

Who, when and why?

A well-functioning board requires ongoing assessment of its collective performance, and of the contributions of each board member. Even though board members are at the apex of the governance of an organisation, there is a universal rhetoric of continuous growth of individual capabilities and contributions.[3] In order to ensure the peer review process is a beneficial and comprehensive exercise, it requires an investment of time and diligence to understand the attributes of one’s board peers. This enlivens Jeffrey Sonnenfeld’s fundamental idea that a ‘great board’ is a ‘robust, effective social system’ that displays a ‘virtuous cycle of respect, trust and candour’.[4]

As individual board members mature (and so too do their boards), introducing a peer-to-peer assessment opportunity contributes an experience to yield some of the most productive results out of any form or type of board evaluation.[5] When considering peer assessments, it is crucial for board members to understand that the constructive framing of feedback far outweighs what can be done through negatively providing feedback.[6] That is the approach where in doing so, the focus shifts to performance features that are within individual controls and often generating more goal-directed opportunities than before.[7]

Despite the potentially enriching conversations and feedback that could be obtained through a peer-to-peer process, it is not a recommended exercise appropriate for all boards. From our 20 years’ experience, it is ideally suited towards boards who have a strong working dynamic and/or desire a deeper dive into their performance development. In addition, boards that are time poor, or not willing to dedicate the effort required to effectively evaluate and put action plans in place, should also steer clear.

Designing your approach

There are no hard and fast rules when it comes to peer assessments for boards, but our good governance practices provides some useful guidance. The following is a non-exhaustive list of some considerations to have in mind when looking to develop and incorporate a peer review exercise:

• Start with the right drivers: It is imperative that like any board decision, the peer evaluation process should begin with setting clear, mutually agreed objectives and criteria on which to base each individual assessment. At a minimum, this should include a mutual understanding that the purpose of the evaluation is to help board members be more effective and not be a personal critique. This can be reinforced by reminding participants of the societal golden rule of ‘treating others like you want to be treated’.[8] This scene-setting discussion more often than not provides a significant amount of insight into both seen and unseen expectations participating board members may have. It is also at this point where the board should decide the anonymity of responses and the way results will be shared. Again, this will vary depending upon a board’s composition, size, interests and time available.
  
  
• Use the right people: When looking at how a board and peer review might be facilitated, it is important to understand what is required of the board through its own governance policy detailing any parameters around evaluation cycles. Specifically for peer review exercises, it is important for the board to collectively consider the value an external consultant can bring to oversee and manage the process. Not only can a consultant provide a veil of confidentiality and security to the participants, but they can offer the dual advantage of discretion and objectivity when collating and distilling the feedback to each board respondent.
  
  
• Take the right approach: A process which requires board members to jump through dozens of hoops, takes an extensive amount of time, and produces an extensive number of graphs and charts does not equate to a good approach. The only way to decide what the most suitable peer assessment process is for a board, is to create or co-design (with or without an external consultant) a method that directly promotes a constructive process and outcome. Appropriate approaches can include a combination or otherwise of written or online surveys including quantitative and/or qualitative questions, and interviews with an external consultant. One-on-one interviews or discussions with a facilitator about the feedback often can be particularly valuable when it comes to seeking and contextualising the information gathered. It is human nature to hide behind the written (or online) word, but it is a far more difficult task to hide behind an in-person interaction.

• Utilising the results right: When used effectively, the results of a peer evaluation can complement a full board evaluation process and provide nuanced feedback for individual board members to consider and improve upon. The way in which feedback is delivered to each board member is crucial to ensuring that the process and results are seen with honesty, integrity, and credibility, and gives actionable outcomes through meaningfully identifying improvement opportunities made available. This may become skewed if peer information is delivered unfiltered or insensitively to board members directly as it can cause significant damage to individual confidence levels and the whole board dynamic. It is in the board’s best interest to ensure individual board members are empowered by the feedback given and supported by the whole board in their efforts in their journey afterwards.

Board Matters’ philosophy

It is Board Matters’ philosophy that improvement opportunities, no matter how small, are always available to harness when in the pursuit of governance effectiveness and excellence.

Our recommended approach to an effective set of peer evaluation questions should address the following categories and attributes of board members’:

• Governance knowledge
• Industry/organisational knowledge
• Strategic thinking and insights
• Conflict management
• Interpersonal relationships
• Challenging and constructive contributions
• Meeting preparation and participation
• How behaviours align with values/purpose

Peer assessments should be an exercise that invigorates and enhances individual and collective capabilities, rather than one that causes anguish and harm. If you’d like to discuss further how to ensure the board achieves a process that is akin to the former and not the latter, please feel free to contact us anytime.

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[1] Burns, Robert, ‘To a Louse’ (1786) Copy of poem accessible via <link>.

[2] Bohn, Karen and Davis, Sandra, ‘Is your board ready for peer evaluations?’ (2016) The Corporate Board (reprint) 37(216), 3.

[3] Ibid.

[4] Sonnenfeld, Jeffrey, ‘What makes great boards great’ (2002) Harvard Business Review 80(9) 126.

[5] Bohn, Karen and Davis, Sandra, ‘Is your board ready for peer evaluations?’ (2016) The Corporate Board (reprint) 37(216), 3.

[6] Gnepp, Jackie., et al, ‘The future of feedback: Motivating performance improvement through future-focused feedback’ (2020) PloS one 15(6).

[7] Ferrante, Donatella., et al, ‘Improving the past and the future: A temporal asymmetry in hypothetical thinking’ (2013) Journal of Experimental Psychology 142, 23–27.

[8] Strickland, Justin, ‘Navigating the peer review process’ (2016) APA Psychological Science Agenda, 4.