Jersey boards have you ran your periodic self-assessment, or external assessment, of the board’s effectiveness.
Comsure help firms with self-assessments. And at this time Jersey firms should be thinking about this because the codes of practice for Jersey regulated business says
- All aspects of corporate governance arrangements must be subject to appropriately regular review to ensure their continuing adequacy in light of the registered person’s business activities and risk profiles and include a periodic self-assessment, or external assessment, of the board’s effectiveness.
Comsure can assist board[s] with this process and as a starter for ten here is 11 questions to get you up and running……
X11 Questions and reflection
True/False: My board maintains a proper ratio of governing vs executing.
- Reflection: Recall the basic principles of governance. If you are executing, who is maintaining oversight over you? Why aren’t the executive team executing and the board governing?
True/False: My board possesses the required competencies to fulfil its duties.
- Reflection: Competencies can be industry-specific or universal (such as being an effective director). Many boards are reluctant to replace members, yet the needs of the organisation shift and demand new competencies, particularly in the digital age.
- Does your board have a director trained in corporate governance who could take the lead? Or does it adopt the outdated view of governance as a matter for the corporate secretary, perhaps in consultation with owners?
True/False: The frequency and duration of my board meetings are sufficient.
- Reflection: Do you cover what you must cover and have ample time for strategy discussions? Are discussions taking place at the table that should be conducted before meetings?
How frequently does your chairperson meet with management: weekly, fortnightly, monthly, or otherwise?
- Reflection: Meetings can be face-to-face or virtual. And do you consider email traffic between the chair/board and management – is correspondence at set times (e.g. before scheduled meetings/calls) or random in terms of topic and frequency?
Is this frequency excessive, adequate or insufficient?
- Reflection: Consider what is driving the frequency of the meetings (or email traffic). Is there a pressing topic that justifies more frequent interactions? Is there a lack of trust or lack of interest driving the frequency?
True/False: My board possesses the ideal mix of competencies to handle the most pressing issue on the agenda.
- Reflection: If one issue continually appears on the agenda (e.g. marketing-related), there could be reason to review the board’s effectiveness with regards to this issue, and probably the mix of skills within the current board. If the necessary expertise were present at the table, could the board have resolved the issue?
True/False: The executive team is competent/capable. If “false”, is your board acting on this?
- Reflection: At this point, you should be considering whether incompetency is the issue. If so, is it being addressed? How comfortable are you, for example, that your executive team is capable of addressing digitisation?
True/False: My chairperson is effective.
- Reflection: Perhaps incompetency rests with the chairperson or with a few board members. Are elements within control of the chairperson well managed? Does your board function professionally? If not, does the chair intervene and improve matters? Are you alone in your views regarding board effectiveness? A “false” answer here should lead you to take an activist role at the table to guide the chair and the board to effectiveness.
Yes/No: Does your board effectively make use of committees? If “yes”, how many and for which topics? If “no”, why not?
- Reflection: Well-defined committees (e.g. audit, nomination, risk) improve the efficiency of board meetings and are a vital component of governance. In the non-profit arena, use of board committees is less common. However, non-profit boards can equally benefit from this basic guiding principle of good governance.
True/False: Recruitment/nomination of new board members adheres to a robust process.
- Reflection: When are openings posted? Who reviews/targets potential candidates? How are candidate criteria determined? And is there a clear “on-boarding” process that is regularly revisited?
True/False: My board performs a board review annually.
- Reflection: A board review will touch on many elements mentioned in previous questions. Obtaining buy-in for the first review might prove painful. Thereafter knowledge of an annual review will undoubtedly lead to more conscious governance and opportunities to introduce improvements (including replacement of board members). Procedurally, the review of the board as a whole should precede the review of individuals.