Few governance issues are more complex than evaluating board performance. The evaluation of board performance is more art than science, as there is a symbiotic link between management, firm and board performance. It's also rarely easy to determine. A board may be doing a great job of governing a company however, shareholders are upset about the low return on their investment. The board might have inherited corporate, management or governance problems and be working hard to turn things around. It could have also invested in new strategic initiatives and shaped a turnaround strategy.

In other instances the board could be too involved with the operational details and making choices that should be left to the management team. This is especially true when the board is not employing the right method to assess its members. In the absence of a formalized process for evaluation in http://boardroompro.net/managing-conflict-of-interest-at-board-level-4-things-to-know place, it is easy for mild issues to escalate into serious issues that can affect the effectiveness of the board.

The board could have cultivated an informal culture that doesn't consider its performance assessment obligations seriously. This could be because it doesn't have the systems in place to collect performance data, or because it's unable find the necessary skills required for a boardroom to effectively perform its duties of evaluation.

Boards need to not only possess the right abilities, but they should also be open to the results of the assessment. The board should determine areas that require improvement and collaborate with management to devise plans for action. This could include regular training sessions for the board to increase knowledge across the board.