Board Evaluations by Corporate Governance Consultant Canada

There is a key role of the board of directors to the well-being, growth, and survival of the company. These objectives are achieved through the board’s target setting, monitoring, and evaluation performances.

The boards as representatives of the owners of the company owe a duty to all stakeholders to ensure that at the beginning of each business year, objectives to be achieved by the company are agreed with the management who oversees the day to day operations of the organization. It is important that the objectives and goals set at the beginning of each year are reviewed periodically to ensure that variances and deviations from the set goals are quickly analyzed and solutions are found in the event of underperformance or new variables coming into play after the objectives had been set. It is therefore recommended that the board is constituted into functional committees with the view to be met regularly, in order to review management’s performance as it relates to each area of operation.

To ensure that the bores as a whole observation, a good overview of the performance of the organization. The reports and comments, observations and recommendations of each board committee are further escalated to a meeting of the entire board. This way every member of the board is given the opportunity to bring to bear their experience, competence, and specialty into the decision of the board thereby ensuring that the company benefits from the rich combination of members of the board.

In terms of corporate governance, the board would be interested in enforcing strict compliance with statutory laid down regulations in guidelines as some new legislations now holds directors of companies liable for breaches of regulatory guidelines. In some instances, the law may hold them personally liable and open them up to litigation for errors or offenses committed while they sit on the board of the company.

The board’s arrangement and assessment of objectives and goals are vital to corporate governance. Experience has shown that an effective board that is formed by simply bringing very successful people together and this has recently led to increased focus on the activities of the board especially post the banking crisis.

Board evaluations Canada can bring huge benefits and a legitimately led assessment can contribute essentially to execution upgrades on organizational, board, and individual member levels.

All boards, and their directors, and committees can profit from evaluations. Subsidiary boards especially are frequently used for practice by listed organization boards and getting into great governance practices at subsidiary level can be very valuable in the future.

One of the principle objectives of board evaluations is to empower the board to intentionally distinguish and surmount the boundaries that obstruct their adequacy. Building up a compelling procedure for board evaluation can send a positive signal to the directors that board individuals are focused on putting forth a valiant effort.

Professor David R. Beatty of chairmanofboard.com provides corporate governance, board evaluation and CEO consultation in Canada. He offers valuable experience working with global boards and CEOs.