27th February 2019
Category: Board & Committee Self-Evaluation
In a whole range of corporate governance contexts, Boards create committees to assist them in carrying out their duties. In general, while the Board delegates roles to these committees, it is still responsible for their actions and decisions. Too often though, when a committee is established, it becomes increasingly autonomous and disconnected from the Board that created it. This represents a risk for the Board. Its ability to exercise oversight is reduced if it’s not regularly communicating with its committees; it can also lead to inconsistencies in decision-making.
This disconnect is quite common and it’s a corporate governance problem. Where we’ve experienced it, or witnessed it, generally one or more of the following characteristics exists:
As we’ve discussed previously in these blogs, we chose Board Self-Assessment Evaluation as the topic of our first One Question Guide because we think there’s an opportunity for Boards and organisations to get more from that process. Self-evaluation should also be carried out by the committees of Boards and this is something we’ve seen forgotten in even the most governance-conscious organisations. It’s another indicator of a disconnect but it could also form part of the solution in bringing the business of committees back in line with the business of the Board.
Towards this goal, we’ve produced two supplements to the Board Self-Assessment Evaluation Guide with ready-to-use questionnaires for the self-evaluation of Board committees. Formalising the self-evaluation of the Board and its committees can provide a regular opportunity to assess how well the governance system, in its entirety, is operating and can reconnect the Board with the committees that are acting on its authority.
Our next One Question Guide in development is looking at the whole area of risk. In our blog next week, we’ll be talking about some of the objectives we have set ourselves for that guide.
For information on One Question Guides published to date by O’BRIEN / Governance Design, visit our shop. For information on related consultancy, facilitation and workshops provided by the company, visit our website.
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Here at O’BRIEN / Governance Design we’ve entered into a new venture with the launch of our online One Question Guides.
The importance of Boards periodically reviewing their performance is now well-established in governance practice.