What can you do when the results from your board evaluation or direct assessments come in low?
Across North America, boards have made strides in routinely assessing individual director competencies in financial literacy, leadership and risk, compliance and security and operating legislation. Doing annual board evaluations has become essential to demonstrate strong board performance and to score well on corporate governance evaluations and board examinations.
Trouble is, even though more and more boards have a good evaluation process in place to identify competency gaps, many fail to raise director competency with training. Why is that?
Talking with our customers, it turns out, many boards worry that director training is too expensive, that assigning training is asking too much of directors (especially if they are unpaid), and then there’s the concern that giving directors full competency would provoke them to meddle in company affairs.
The facts help dispel all of those anxieties. Training options include no-travel, affordable online subscriptions. And as to the meddling, turns out well-trained directors are a performance enhancement, not a detriment.
Filene Research Institute reported in its research on Tracking the Relationship between Credit Union Governance and Performance, “One way to encourage better governance is to demand individual improvement. Surveyed directors who ranked their boards in the top decile of governance performance all had formal continuing- education policies, while those in the lowest decile rarely did.”
So, what smart action can you take to close the competency gap on your board?
Do you know of additional training providers? Let me know and we can add to our list.
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