ACCA SBL Syllabus B. Governance - Frameworks for assessing the performance of boards - Notes 7 / 12
Frameworks for assessing the performance of boards
Appraisal of the board's performance is an important control over it.
Aimed at:
improving board effectiveness,
maximising strengths and
tackling weaknesses.
The UK Corporate Governance Code recommends that performance of the board, its committees and individual directors should be formally assessed once a year.
Ideally the assessment should be by an external third party who can bring objectivity to the process.
The appraisal of the board should include:
A review of the board’s systems (conduct of meetings, work of committees, quality of written documentation)
Performance measurement in terms of the standards it has established, financial criteria, and non- financial criteria relating to individual directors
Assessment of the board’s role in the organisation (dealing with problems, communicating with stakeholders)
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