Purpose-This paper examines how board evaluations have emerged as an important tool in public policy and corporate practice for enhancing board effectiveness. Design/methodology/approach-We review the extensive literature on effectiveness and the emerging literature on board evaluation to identify ways to assess the current policy direction for external evaluation of corporate boards. Findings-The paper develops an integrated framework of effectiveness that can be used as a tool for board evaluation, in particular for externally facilitated exercises. Research limitations/implications-Through its integration of prior conceptual work this paper advances our theoretical understanding of this emerging part of policy and practice, with to-date lack much empirical basis. Practical implications-The framework we develop shows ways to focus how the practice is conducted by boards and external evaluators alike. Social implications-It can also help policy formation by pointing out the limitations as well as benefits of various policy options. Originality/value-In pointing to ways to develop study of the field through empirical research it provides direction for future academic research. It also identifies a need for and direction toward the professionalization of practice.

Recurrent crises in corporate governance have created policy pressure for greater attention to the effectiveness of boards. Since the 1990s there have been calls for boards to undertake regular self-evaluation. Since 2010, the UK Corporate Governance Code has urged large corporations to engage outside parties to conduct such appraisals at least every three years, a move other jurisdictions have copied. Despite its importance, little research has been conducted into processes or outcomes of board evaluation. This study explores the attitudes of directors on board evaluation, whether self-administered or facilitated by others. We interviewed 17 directors with some 50 listed-company board appointments between them. Even though their companies fall below the threshold specified in policy, all undertake board self-evaluations and evaluations using professional facilitators. We find broad acceptance of the principle and recognition of the value of board evaluation. We also find some acceptance amongst those directors who have implemented external evaluation of the benefits of using outside facilitators. Their evaluation of the evaluation process points towards a need to professionalise the practice of outside facilitation, and to conduct research into the skills and knowledge needed and the processes used.

For at least 30 years, and with growing intensity through recurring corporate governance crises, public policy in many countries has been striving to encourage boards of directors to undertake regular evaluations. The policy push has stimulated much practical advice, many tools for evaluation, strong encouragement from professional bodies, and considerable skepticism from those being evaluated. While some scholars have sought to conceptualize the practice, we lack a fuller understanding that can help us see how the promised benefits and feared drawbacks arise. This Director Notes report reviews the policy context and practitioner accounts and builds frameworks for practice and policy analysis. The authors find that board evaluation is a multidimensional concept in which the interactions across the dimensions open paths to improvement of boards processes while also to unintended consequences. The authors then suggest avenues for future research and a shift in policy and practice toward greater experimentation.