The NEDA Handbook Spotlight: Checklist for Evaluating Board Performance

Regular and meaningful board evaluations are essential to maintaining high standards of governance and driving continuous improvement. Here, we highlight some of the most important aspects for consideration through insights from the Non-Executive Directors' Handbook.

An effective board depends on directors who are qualified, capable, and committed to ongoing development. New directors should receive a tailored induction, and all board members should regularly update their skills and knowledge.

Listed companies should carry out an annual evaluation of the board, its committees, and individual directors on a regular basis. Led by the chair - sometimes with external support - this structured review helps identify development needs, informs succession planning, and strengthens board effectiveness.

This article spotlights the Non-Executive Directors' Handbook's practical checklist to help NEDs assess board performance within a clear, structured framework.

The checklist sets out aspects of board performance for evaluation, including exploring:

Roles, objectives and responsibilities:

• Each director has clearly defined personal objectives linked to the overall strategy of the company.
• The objectives are communicated to the other directors and to senior management and key stakeholders as appropriate.
• The board plays a significant role in defining long-term strategy.
• The board has approved an appropriate ethics policy and code of conduct.

Board composition and structure:

• The process of making new appointments to the board has functioned well during the year.
• The board structure/composition is clearly defined and has been subject to review.
• The roles of the chair and CEO are not combined.
• There are appropriate board committees with documented responsibilities.

Skills and skills development:

• There is a unique and clear role description for each director. Otherwise, why is that person on the board?
• There are individual training plans for each director, including the non-executives.
• There is a formal but confidential system in place for the performance review of each individual director.

Personal qualities and contribution:

• The individual directors have abilities in the areas of strategic perception, decision-making, analysis, communication, interpersonal interaction and the achievement of results.
• The individual director participates actively at board meetings and asks probing and difficult questions at meetings and at other times.
• The individual works well with other people and communicates well.
• The individual makes valuable contributions to the board‘s deliberations and work including long-range/strategic planning decisions.
• The individual has a good attendance record at board and committee meetings.
• The individual comes to board meetings well-prepared.
• The individual NED is available when needed.
• The individual NED has suitable business knowledge and an awareness of the industry in which the company operates.

Relationship management:

• The board has a good working relationship with key stakeholders (management, other employees, external auditors, shareholders and other
• investors, analysts).
• There is a defined process for a continuous flow of information from management to the board and from the board to management.
• Directors are able to obtain independent professional advice on company matters.

Board meetings:

• There are regular board meetings – each quarter as a minimum.
• The attendance of directors at board meetings is recorded, and minutes of meetings are produced.
• Meetings have open discussions to ensure that the board comes to an informed and fully considered decision.
• The NEDs meet on a regular basis, with management and other stakeholders, to keep up to date with the company’s business.

Communication and reporting:

• The board regularly issues open communications across the company, to keep staff up to date with strategic developments.
• The board has open communication lines with investors and analysts.
• The board receives regular reports from teams across the business: operations, risk management and assurance functions.
• The board has complied with its disclosure guidelines for disclosures to various stakeholder groups.

Business knowledge:

• There is a formal orientation/induction programme for all directors.
• Board members know, understand, apply and analyse strategic business direction.
• The board exhibits knowledge in all key areas (finance and accounting, risk management, marketing strategy, HR issues, improving business performance, change management).

Learn More:

You can read more about evaluating board performance, with essential guidance on these elements of the checklist, in our chapter on 'Director development and board performance evaluation' in the Non-executive Directors' Handbook, available at the link here (Premium Members Only).