The Handbook of Board Governance, 3rd Edition

75Making the Most of Board Evaluations: An Overview of Board Evaluation Practices in the U.S. and Globally

Anthony Goodman, MA

Senior Client Partner & Head of Board Effectiveness Practice in North America, Korn Ferry

Sarah E. Oliva, BA, MBA

Principal, Board Effectiveness Practice, Korn Ferry

Raising the Bar on Board Evaluations

Board self-assessment has become an established element of corporate governance worldwide. Tighter standards among investors and regulators are driving new approaches to how boards evaluate themselves, what they evaluate, and how they act on their findings. Globally, standards and best practices vary, but many regions (including the United States) have the opportunity to learn from these different practices to improve their own approaches.¹

Board Evaluations: Current State and Best Practices

In the United States

The largest institutional investors (BlackRock, State Street, and Vanguard, among others) have long advocated that age and term limits are blunt weapons for improving board effectiveness and a “rigorous” board evaluation process is required. In 2019, the Council of Institutional Investors Research and Education Fund noted, “Robust evaluation processes provide an important conduit for change as companies require new skills, perspectives and strategies over time. For this reason, investors increasingly regard the review process and its disclosure as key opportunities to enhance board effectiveness and shareholder value.”²

Boards have been ...