1. CONDUCT OF BOARD EVALUATION
BOARD EVALUATION SEMINAR 27TH -29TH JULY 2016 REEF HOTEL, MOMBASA
The Institute of
Certified Public Secretaries
of Kenya
CONDUCT OF BOARD EVALUATION /
CS Jacqueline Waihenya Maina

2. Outline Who & What is being evaluated Board Evaluation Tools
Process of Board Evaluation

3. Who & What is being Evaluated
A board evaluation should provide guidelines for effective board of director performance
It should answer the question, “are we as a Board contributing to the Company’s ability to meet its purpose”.

4. Focal Points to Evaluate
Organs to evaluate:-
Board;
Committee;
Individual director evaluations;
Chairman
CEO; and
Governance Practices.
Key factors to consider:-
Who has the overall responsibility for the process (usually the Chairman)
Who is going to have input into the process
The structure and content of the process
What the reporting is going to take place and to whom, and
Most importantly, how the outcome will be acted upon by the Board

5. Who & What is being Evaluated
All areas the Board is responsible for:
Membership Accountability
Governance
Board Operations
Legal Responsibility
Financials
Planning
Board/Members Relations
Possible Parameters
Attendance
Contribution
Participation
Preparedness
Commitment
Connections financial skills
Business acumen
etc

6. What should the Evaluation Cover?
All areas the Board is responsible for:
Membership Accountability
Governance
Board Operations
Legal Responsibility
Financials
Planning
Board/Members Relations

7. What qualities should the evaluator possess?
Knowledge of the company’s history and strategic direction;
Experience with and understanding of the Board members’ roles;
Capacity to listen and read body language;
Ability to focus on constructive ideas;
Ability to stay calm, be objective and avoid arguments;
Ability to trust and to respect confidentiality

8. Process of Board Evaluation

9. Example of Step-by-Step Evaluation
Get agreement to the evaluation concept from board members;
Define the duties of the Board;
Establish the evaluation core criteria;
Questionnaire design;
Undertaking assignments;
Analysis of results;
Findings and recommendations;
Feedback session;
Organising post evaluation board training;
Ongoing monitoring

10. Board Evaluation Tools
Full Board Self Evaluation;
Board Committee Self Evaluation;
Non-Board Committee Evaluation;
Outside Consultant Evaluation.

11. Full Board Self Evaluation
PROS:
Involves entire Board
No one knows more about the Board than the Board itself
CONS:
Can be a lengthy process

12. Board Committee Self Evaluation
PROS:
Again, no one knows the Board better than the Board itself;
Will proceed more quickly since there are fewer people involved.
CONS:
Possibility of bias since the whole Board may not involved.

13. Non Board Committee Evaluation
PROS:
Provides an unbiased opinion
Outside evaluation may provide the board with information they have never considered before
CONS:
Committee will be looking from the inside in.

14. External Consultant Evaluation
PROS:
Familiar with industry as a whole
Provides:
Objective criteria
Outside perspective
Precedent - future Evaluations
Unbiased view
Expert
Independent
Ability to Benchmark
CONS:
The Consultant will be looking from the outside in.
Can be expensive
Threatening to vested interests
Administration/Confidentiality
Time consuming
Can identify problems the BOD does not want to deal with
When to use external consultant:
First time evaluations
During an emotionally charged Year
For a Board which has difficulty building consensus
Internal process has not worked well in the Past.

15. Board Evaluation Instruments:
Questionnaires
Structured Interviews;
Peer Review Matrix;
360 degree analysis;
Annual discussions between the Chairman & individual directors;
Self evaluation;
Board Evaluation Report/Results/ Recommendations;
The questionnaire for the Directors usually contains 4 sections, namely,
evaluation of the Board of Directors as a whole;
evaluation of the Chairman by the Directors;
evaluation of the Chief Executive by other Directors;
evaluation of the Company Secretary by the Board

16. Chairman’s Evaluation:
Areas of a Chairman’s performance that should be assessed are as follows:-
Chairing board meetings;
Providing input to board agendas;
Working with the CEO;
Communicating with fellow directors; and
Communicating with shareholders and other stakeholders.
Areas of a Chairman’s performance that should be assessed are as follows:-
Chairing board meetings;
Providing input to board agendas;
Working with the CEO;
Communicating with fellow directors; and
Communicating with shareholders and other stakeholders.

17. Basic contents of the evaluation instrument
General operations of the Board
Board structure
Selection, Appointment, induction, Development, Rotation and succession of directors
Board effectiveness
Strategic direction
Accountability
The Chairman- Leadership, Stakeholder relationships
The CEO-Leadership, Stakeholder relationships
Individual directors-Training, Experience, Competence and skills, Commitment to Board functions and the Company, Knowledge of legal duties and liabilities, Conflicts of interest, Preparation for meetings, Conduct and integrity, Teamwork

18. Evaluation Instrument
The Evaluation instrument developed is required to measure whether the Board:-
Provides leadership and looks at the right issues;
Has met its key performance indicators;
Provides an effective mix of knowledge, experience and diversity;
Works in terms of board dynamics and behavior;
Has effective processes.