We received some great thoughts from Prof Bob Garratt in response to our recent blogs about performance appraisals. Garratt is a leading consultant, academic and author[1]on corporate governance and board development. The FRC UK Corporate Governance Code 2016 specifies “The board should undertake a formal and rigorous annual evaluation of its own performance and that of its committees and individual directors.”
In Garratt’s view, board reviews are often just a mechanical process covering compliance and administrative matters. It is important that individual directors show up for meetings, demonstrate that they have read board papers etc, but this does not measure what they individually add to the board. The methodology Garratt uses for these more in-depth and performance related reviews is to gather views from each director about what they believe their co-directors contribute. He asks everyone about themselves and about each other and the board as a whole. He plots their differentiated comments on each question on a grid and looks for patterns and priorities.
Garratt says that the first time a board carries out such an exercise, members are very worried. However, the results are rarely as bad as feared. In fact, generally people receive positive feedback with constructive insights about board and individual development. He argues such processes both raise board performance, and ensure high standards of corporate governance.
The people at the top set the tone and the spin-off benefit is a much more positive and effective performance review climate throughout the organisation.
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Janice Caplan
27 March 2019
©Copyright Janice Caplan 2019
[1] Stop The Rot: Reframing Corporate Governance For Directors and Politicians, Greenfield Publishing, 2017