Best governance practices are rooted in continuous improvement, such as board evaluations. Previously thought to be reserved for large public companies, board evaluations are gaining traction across a broader range of organizations. An analysis from The Conference Board, Inc. indicates that 55% of S&P 500 firms disclosed a combination of full board, committee, and individual evaluations in 2024. For the Russell 3000, the adoption of combined board, committee, and individual evaluations has risen significantly from 24% in 2020 to 38% in 2024.¹

Evaluations can be driven by recent growth, leadership transitions, and investor pressure, or they can simply be a proactive measure to support a high-performing board. For these reasons, effective boards increasingly embrace regular self-evaluations, recognizing that strong oversight starts with institutional self-awareness.

Looking Inward

Boards that initiate an evaluation process demonstrate an intentional commitment to advancing governance practices. Self-assessment signals accountability. The decision to seek a board evaluation reflects a board chair’s commitment to governance, performance, transparency, and continuous improvement.

A board evaluation can uncover a healthy dose of honesty. A 2024 survey of corporate directors found that nearly half believe at least one board member should be replaced, and a quarter say two or more should be replaced.² Business leaders recognize that cohesion and collaboration shape effective governance. It’s becoming increasingly clear that effectiveness isn’t limited to impressive individual backgrounds and experiences, but extends to how the board operates as a whole. Equally important, the right director voices must be in the room, and each voice must contribute valuable, strategic input.

Creating a Comfortable Framework

Once a board decides to conduct an evaluation, the next step is determining who should lead the evaluation. While some boards choose to manage the process internally, that approach quickly reveals its limitations. Gathering useful feedback, protecting anonymity, and moderating sensitive discussions become much more challenging with an internal lead.

An external evaluator brings neutrality, structure, and objectivity to the process. Directors tend to share more candid responses when they trust that confidentiality will hold, and feedback becomes more impactful with unbiased expert interpretation. A board evaluation sparks conversations best led by someone who’s skilled in navigating group dynamics, connecting themes, and deepening dialogue.

Starting With Business Strategy

The most effective board evaluations start with the company’s goals, challenges, and long-term strategy. Evaluators must understand the company’s governance structure, current board composition, and individual responsibilities. They must also ask critical questions, including:

• How effectively does the board set and communicate the organization’s strategic direction?
• How clearly defined and effectively maintained are board roles? Is there a clear line of demarcation between the board and the management team’s responsibilities?
• Do individual directors contribute to board discussions and decision-making?

As the board’s role expands, so must its method for measuring performance. Today’s boards weigh in on a plethora of topics, including customer engagement, supply chain strategy, artificial intelligence adoption, sustainability, and brand reputation to name a few. To contribute meaningfully, board composition must support the company’s future state as well as its present-day needs.

Mapping the Skills That Matter

With strategy and structure in focus, boards often turn next to building a skills matrix. This straightforward tool clarifies which competencies exist on the board and which critical skills are lacking. Some companies find functional gaps in finance, technology, risk management, or supply chain expertise. Others determine they need directors who have experience scaling businesses, entering new markets, or operating in highly regulated environments. A strong skills matrix shows how existing strengths align with future challenges and where a new voice could add strategic value.

Surveying the Directors

Strong board evaluations avoid assumptions, so soliciting feedback directly from board directors is a critical component in the process. This allows directors to reflect on their own individual contributions, those of their peer directors, and the collective performance of the board as a whole.

Surveys work best when directors feel free to respond candidly, so maintaining anonymity remains essential; however, follow-up interviews often yield the most valuable insights. Conversational one-on-one interviews add key context, such as differences in perception, underlying tensions, and feedback that might not emerge in a group setting or in a written evaluation. Evaluators must not only collect input but also interpret it skillfully. Identifying nuanced patterns and framing observations constructively requires a high degree of analytical rigor and professional judgment.

Acting on Key Insights

The true value of a board evaluation comes from turning the results into a clear path forward to effect change. Defining next steps, assigning responsibility, and prioritizing changes with an implementation timeline are helpful in holding directors accountable for deriving positive impact from the board evaluation process. An outcome of the evaluation may involve refreshing board seats, adding directors with diverse perspectives, or adjusting meeting agendas to reflect current priorities.

Board composition continues to evolve. No longer static or permanent, board seats turn over more frequently, and companies now seek fresh skills to match emerging needs. A well-executed board evaluation equips the board to lead with purpose and align with the strategic direction of the organization.

To explore how DHR can support your board in advancing performance, alignment, and long-term strategic success, contact Heather Smith, Partner, Board & CEO Practice, or Christine Greybe, President, Leadership Consulting.

¹ Harvard Law School on Corporate Governance, Board Practices and Composition: 2024 Edition, The Conference Board, Inc.

² PwC, 2024 Annual Corporate Directors Survey