Heather Smith
Managing Partner, North America Board & CEO Practice
Boards today operate under greater pressure: decision cycles are shorter, oversight demands are broader, and scrutiny from investors, regulators, and other stakeholders is more intense. At the same time, the board’s role has expanded beyond traditional oversight to more direct engagement with strategy, risk, and leadership priorities. To meet those expectations, boards must function effectively as a group—how directors exchange perspectives, make decisions, and maintain accountability matters as much as the issues on the agenda.
Board assessment is an effective tool for surfacing valuable insights about board dynamics and performance in this environment. What often remains unresolved, however, is whether boards use those insights to prepare for future pressure, uncertainty, and governance challenges.
The Gap Between Board Assessment & Governance Practice
Board assessment is now a standard practice across public companies and is increasingly common in private organizations. More than 90% of boards conduct some type of evaluation, but only 7% of board evaluations result in specific action plans.1
Those figures underscore the central tension. The gap between evaluation and action has become a governance issue in itself. Boards invest in assessment, but the process doesn’t necessarily change how the board governs.
Heather Smith, Managing Partner of DHR’s North America Board and CEO Practice, described how expectations regarding governance have evolved, pointing to issues now competing for board attention, including emerging technologies such as artificial intelligence and related developments.
“In this highly complex environment, the board’s role has shifted from compliance oversight to increasingly more strategic guidance. Boards need to respond to multiple stakeholders, including employees, outside advisers, and government. It’s a much more demanding job than it was even five years ago.”
– Heather Smith, Managing Partner
That expanded scope has direct implications for how boards evaluate their own effectiveness. Annual assessments may follow a familiar structure, but boards now conduct them within an increasingly demanding governance environment. Boards must evaluate how directors exchange perspectives, interpret information, and contribute to decisions as a group.
Even with that recognition, boards don’t consistently connect evaluation to governance practice. Assessment captures how directors perceive performance, but it doesn’t always establish how the board should respond. Without a defined path forward, the outcome remains informational rather than operational.
Sarah Price, Principal, Leadership Consulting at DHR, described the implications of that gap in how boards interpret their own performance.
“It’s not just about understanding how directors perceive performance. When assessment findings are measured against leading governance practices, boards should come away with a clear roadmap for change. The diagnosis is only the first step—you need a treatment plan that guides how the board will operate differently going forward.”
– Sarah Price, Principal
Effective assessment depends on more than identifying strengths and weaknesses; it requires a disciplined understanding of how the board operates and a structured process for implementation.
Assessment Reveals How Boards Really Operate
A comprehensive board assessment captures perspectives that rarely emerge through regular discussion. Directors form individual views of performance, but structured forums for sharing those views remain limited, so differences in perspective receive little scrutiny.
Effective assessment processes address that gap by gathering input across the board and organizing it into a structured set of themes that reflect how directors experience board performance. That synthesis allows the board to see where views align, where they diverge, and where directors haven’t addressed underlying issues.
“The boardroom is a psychologically complex environment,” Price said. “Not every director feels comfortable expressing their perspective in a group setting.”
Confidential input plays a central role in the process, providing a mechanism for directors to share perspectives that may not arise in formal meetings.
The assessment gives boards a structured view of how directors evaluate governance, oversight, engagement, and decision-making across the board. That perspective highlights differences in experience and expectations. Directors don’t approach board performance from a single vantage point, and assessment creates a way to examine those differences collectively, rather than allowing them to remain implicit.
Boards Benefit From Addressing Gaps Early
Governance gaps often emerge under pressure, when decisions require alignment across directors with different perspectives and limited time to resolve them. In those moments, the board must rely on existing patterns of communication and decision-making, which may not support the level of clarity or coordination required.
Assessment provides a way to identify those conditions upfront. By examining how the board engages, how information flows, and how the board reaches decisions, the process highlights where alignment breaks down and where expectations require reinforcement before those issues affect outcomes.
“Board chairs are coming in wanting more governance rigor and assessment rigor,” Smith said. “They increasingly see the value of assessing how the board operates while conditions remain stable, rather than waiting for external pressures to expose governance weaknesses to stakeholders.”
Ongoing assessment gives boards a basis for identifying governance priorities and acting on them before pressure disrupts board effectiveness.
Trust Defines How Boards Engage and Decide
Trust defines how directors engage in discussion, particularly when decisions require candid input and alignment across differing perspectives. Directors may not express those perspectives in group settings, which can limit how the board evaluates its own effectiveness.
Assessment creates a structured process for candid feedback and shared understanding. Third-party facilitation increases trust in the assessment process and encourages candid discussions of board performance.
“It starts with the chair setting the tone,” Smith said. “But it’s reinforced through how directors engage and how they respond to what they learn.”
Trust becomes visible in board behavior. It influences how directors handle disagreement, respond to feedback, and act on what the board learns through assessment.
That preparation becomes particularly important during periods of uncertainty, when boards must respond quickly, navigate difficult decisions under pressure, and maintain coordinated governance practices.
Related Insight
For additional perspective on how trust affects governance, see “Trust Under Pressure: Strengthening the Board-CEO Relationship.”
From Insight to Action: Board Assessment in Practice
A DHR client approached board assessment with a clear objective, seeking to ensure the board could support accelerated growth. With that goal in mind, leadership engaged DHR to conduct a comprehensive board assessment to gain clarity on how the board operated and where its practices required change.
DHR gathered input through surveys, one-on-one interviews, observation, and benchmarking against governance best practices, then led a structured discussion with the board to review the findings.
The assessment produced a detailed view of board dynamics and identified issues the board hadn’t addressed in previous evaluations. It also provided a clear view of governance and effectiveness gaps, along with individualized feedback for each director.
The board reviewed those findings, aligned on performance gaps, and clarified each director’s role in addressing them. That alignment clarified expectations and established a consistent approach to preparation, discussion, and decision-making.
DHR translated those priorities into a defined set of actions and organized them into a roadmap with near-term steps and long-term priorities.
“What differentiates our work is the roadmap,” Price said. “It gives boards a clear view of what to do next.”
The board used those priorities to guide governance practices, align directors, and support the organization’s long-term growth strategy.
What Effective Board Assessment Includes
DHR’s board assessment solution follows a structured process that draws on multiple sources of input, analyzes performance across governance and board dynamics, and translates findings into defined actions.
- Multiple sources of input: The assessment draws on governance document review, board surveys, one-on-one director interviews, meeting observation, and benchmarking to capture how the board operates across settings.
- Confidential director engagement: Confidential surveys and interviews create a setting where directors share candid perspectives and identify issues that may not emerge in group discussion.
- Structured synthesis of findings: The process consolidates input into board-level and individual director reports, identifying themes across structure, dynamics, and oversight.
- Facilitated discussion and alignment: The assessment includes a full-board readout and individual debriefs, enabling directors to review findings, align on priorities, and define next steps.
- Prioritized roadmap for action: The process produces a defined roadmap that establishes priorities, sequencing, and accountability for follow-through.
- Technology-enabled analysis: The process incorporates AI-powered assessment technology and structured data analysis to support reporting, benchmarking, and insight development.
From Assessment to Governance Action
Boards that invest in comprehensive assessment understand how they operate, including where alignment exists and where it breaks down. That perspective allows boards to address issues directly, improve governance practices, and prepare for future challenges before those pressures disrupt board effectiveness.
Regular assessment also positions boards to navigate leadership transitions, changing stakeholder expectations, operational disruption, and periods of uncertainty with improved coordination and trust across directors.
A structured approach connects insights to action. It sets priorities and establishes accountability for follow-through.
“The real question is, does your assessment actually improve how your board governs?” Smith said.
Boards answer that question through coordinated decision-making, director accountability, and governance practices that reflect assessment findings.
For more information about how boards can turn assessment into meaningful governance action, contact Heather Smith or Sarah Price.
Meet the Experts
Elevating Board Effectiveness
Through Insight, Alignment, and Action
DHR partners with boards to deliver comprehensive, data-driven assessments that strengthen governance, enhance boardroom dynamics, and support the achievement of strategic objectives. Our approach provides a holistic view of board effectiveness, plus a practical roadmap for improvement.
- Nasdaq 2023 Global Governance Pulse Report