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Perspectives
Back to basics: Board education and evaluations
Board Practices Quarterly, September 2022
By Natalie Cooper, Bob Lamm, and Randi Val Morrison
To provide effective oversight, it’s critical that boards keep themselves apprised of the rapidly evolving governance landscape and regularly evaluate their performance. With respect to board education, there is no single approach that works for every board; rather, education format, content, and delivery should be tailored to the needs of the directors, the company’s business, and other relevant factors. Similarly, board evaluations—including the scope, methodology, and content—should be tailored to the company’s facts and circumstances.
This Board Practices Quarterly looks at how boards approach education for the full board and committees and board evaluation practices. It presents findings from a July 2022 survey of members of the Society for Corporate Governance that addressed, among other matters, board and committee education topics and board assessment facilitation processes and related disclosure.
Select findings
Respondents, primarily corporate secretaries, in-house counsel, and other in-house governance professionals, represent 154 public companies of varying sizes and industries.1 The findings pertain to these companies and, where applicable, commentary has been included to highlight differences among respondent demographics. The actual number of responses for each question is provided.
Download complete findings as well as results by respondent demographic in boxes above.
Rate your board’s overall effectiveness in the following evaluation practices. (112 responses)
76% of large-caps and 69% of mid-caps rated their boards as very effective overall in assessing full board and committee performance.
Indicate which of the following topical areas (or similar) are regularly covered in your company’s periodic board evaluation. [Select all that apply] (111 responses)
What is publicly disclosed about your company’s board evaluation process? [Select all that apply] (112 responses)
- 78% of large-caps and 71% of mid-caps report publicly disclosing their board evaluation process and methodology.
- Board evaluation “topics” and “outcomes” are more often disclosed by large-caps than mid-caps. According to survey respondents:
- 40% of large-caps compared to 7% of mid-caps disclose topics covered in the board evaluation.
- 20% of large-caps compared to 5% of mid-caps disclose outcomes of the board evaluation.
End notes
1 Public company respondent market capitalization as of December 2021: 48% large-cap (which includes mega- and large-cap) (> $10 billion); 59% mid-cap ($2 billion to $10 billion); and 3% small-cap (which includes small-, micro-, and nano-cap) (< $2 billion). Respondent industry breakdown: 32% energy, resources, and industrials; 30% financial services; 19% consumer; 10% life sciences and health care; and 9% technology, media, and telecommunications.
Small-cap and private company findings have been omitted from this report and the accompanying demographics report due to limited respondent population.
Throughout this report, percentages may not total 100 due to rounding and/or a question that allowed respondents to select multiple choices.
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Carey Oven
Enterprise Leader Development & Succession | Deloitte & Touche LLP
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