Board Evaluations Are The Hot Topic in 2025
As investors, consumers, potential activists and potential buyers are speaking up about board effectiveness, they want to see results that board directors and company executive are meeting their fiduciary oblications, have full integrity and contribute to organizational improvements and success.
Yet, many boards are not taking board evaluations seriously. Per research by the Diligent Institute:
- 44% of directors say board assessments are not effective as members don't invest seriously in the process.
- Further, 49% of directors say they want to replace at least one director on the board, stating their discontent in the board performance ties to select individuals.
Clearly, to take company governance performance seriously, boards must commit to a process that is thorough and confidential and can open candid discussions and insights into positive chanes. This involves committment for every member to participate and implement changes based on the evaluation finding.
Improvement: Independent Board Evaluations
The latest trend is to engage a qualified independent party to conduct the evaluation.
- Both S&P 500 and Russell 3000 companies have seen a steady increase in the use of independent assessment facilitators for board evaluations
- The S&P 500 leads significantly, with 38% of companies employing these facilitators in 2024, up from 21% in 2020, compared to 17%
- In the Russell 3000, increase in use of independent facilitators ran up from 10% over the same period.
Boardwise Board Evaluation Support
We support companies in more than 56 countries and for a wide line of industries with a board evaluation process that includes insights from both directors and executives as a basis for us to then suggest best practices for continuous improvement. Clients tell us our approach is both helpful, constructively candid and respectful for all involved.
Reach out to us to learn more.
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