Independent board evaluations are essential. They ensure accountability, transparency, and effectiveness, offering boards a chance to reflect on their strengths and identify key areas for improvement.
But despite widespread recognition of their benefits, actual practice paints a different picture.
According to Cognadi Systems’ latest analysis, 31% of UK directors believe board evaluations are destined to fail because they are inconsistently applied and lack collective commitment to driving real change.
This issue isn’t just unique to the UK. A study of 187 boards on the New York Stock Exchange also found that only 36% of directors believed their organisation effectively assesses board performance.
The findings further reveal troubling perceptions about board dynamics, where only 64% strongly felt their board welcomed new ideas; 50% believed all members’ skills were fully utilised, and just 46% thought dissenting views were tolerated.
Even among UK executives, there is a stark divide. While 76% of CEOs believe evaluations improve board performance, 45% of other board members see them as ineffective. This disconnect highlights a deeper issue – the role of the Chair in aligning interests and fostering constructive participation.
The Chair’s role in board effectiveness
The Chair is critical in setting the tone for board discussions. An effective Chair encourages open dialogue, ensures all voices are heard, and steers the board toward meaningful engagement.
But despite this expectation, the Cognadi study found that 26% of board directors say their Chair’s leadership performance is not regularly monitored or assessed.
Directors raise three key concerns about their Chairs:
- Facilitating discussions and participation – 23% believe their Chair does not actively encourage a supportive environment.
- Promoting team dynamics – 24% say their Chair does not foster an open and collaborative board culture.
- Allowing time for debate – One in five board members feel meetings are too short and infrequent for meaningful discussions.
If the Chair fails to address these issues, board evaluations become little more than a formality.
The CEO’s relationship with the board
The dynamic between the CEO and the board is another crucial element of board effectiveness. Evaluations should ensure the CEO’s strategies align with the organisation’s mission and long-term objectives.
However, the Cognadi study reveals that 30% of boards have no regular process for monitoring CEO performance. Of those that do, fewer than half believe their assessments contribute to better board performance.
The core issue? A misalignment between the CEO’s focus and the board’s expectations. If left unaddressed, this disconnect can erode trust and diminish the effectiveness of board evaluations.
One FTSE 250 board member summed up their frustration, stating: “Our annual evaluation is just a tick-the-box exercise that doesn’t investigate interpersonal dynamics, engagement levels, or the unspoken issues within the boardroom.”
What needs to change?
The solution lies in developing meta-knowledge—understanding not just what directors know, but how they interpret and apply that knowledge. This shift is vital to bridging perception gaps and fostering stronger strategic alignment.
For board evaluations to drive real impact, both Chairs and CEOs must be assessed against specific criteria, namely:
- Does the CEO and Chair relationship foster a strong alliance that benefits both the board and executive team? (20% of directors say it does not)
- Does the Chair handle conflicts and divergent views effectively?
- Are CEO actions aligned with the board’s vision and strategy?
- Does the board engage in meaningful debate and decision-making? (25% say sensitive issues are not handled well)
- Does the CEO support inclusive decision-making? (25% believe the CEO undermines contributions)
- Is there a clear CEO succession plan? (One in four boards lack a structured succession strategy)
Improving board member contributions
The value of individual board members cannot be underestimated. Their ability to navigate short-term volatility and build trust with stakeholders is crucial. However, many directors feel disconnected from the evaluation process and unsure how their input contributes to board effectiveness.
Regular evaluations, when done properly, help align board members on competitive advantage, strategic vision, and long-term purpose.
The Cognadi study additionally suggests that Non-Executive Directors (NEDs) are eager to play a larger role, but require stronger stewardship from the Chair.
Encouraging ongoing professional development and fostering a culture of continuous learning can help to bridge this gap, leading to better decision-making and a more effective board.
Five steps to effective evaluations
Cognadi Systems outlines five proposed steps for improving board evaluations:
- Set clear and balanced evaluation criteria – Include both financial results and qualitative factors like leadership, collaboration, and ethics
- Ensure board diversity – 20% of directors say diverse perspectives are not effectively leveraged in decision-making
- Develop a skills matrix – 23% of boards do not maintain a structured framework to assess skills and expertise
- Foster the right behaviours – Board members must display the right capabilities to tackle strategic and operational challenges
- Commit to continuous improvement – Follow up on evaluation outcomes to ensure meaningful action is taken
The bottom line: Board evaluations are a necessity, not a choice
Board evaluations are more than just a compliance exercise. They are essential for ensuring accountability, transparency, and long-term success.
However, the Cognadi study shows that 31% of UK board evaluations fail due to a lack of follow-through, misaligned expectations, and a reluctance to embrace change.
CEOs often see evaluations as tools for improvement, but many board members view them as superficial exercises that fail to address real issues. Without closing this gap, evaluations will continue to miss the mark.
A well-executed board evaluation fosters honest dialogue, strengthens strategic alignment, and improves governance. It is not an afterthought—it is a fundamental tool for driving sustainable growth and organisational success.