A NED’s checklist for advising boards on external reviews.
As a board effectiveness reviewer, I have carried out reviews for all types of organisations ranging from FTSE 100s to public sector bodies to major charities. Whilst the board review part of my consultancy work hasn’t yet fulfilled my objective of an international practice ‒ the furthest I have travelled so far is Preston! – it has nonetheless provided an opportunity to learn about different sectors. So I have walked through breweries (and sampled the product!), traipsed around farms, and crossed dams, all in the pursuit of assessing effective boards!
Boards may engage an external review either as routine practice or to address a specific issue. Whilst the appointment of an external reviewer is the responsibility of the Chair (see below), the whole board is likely to be involved in the review. NEDs can play an important role in recognising when a board review may be useful, and can also advise on best practice. Like effective governance, external board reviews should not be prescriptive. But by building their knowledge of the matters boards might consider when undertaking an external review, and how best to commission a review, NEDs can add value to the process.
Request for Particulars (RFP) or tender document
Boards need to be as clear as possible about what they want from the review. Is this a triennial review or one being undertaken for a specific purpose – for example, to help a new Chair in their role? While boards don’t need to provide reams of data, I have seen RFPs which provide so little information that potential reviewers must ask numerous follow-on questions to have any chance of being able to submit a realistic proposal. If boards have used an external reviewer frequently in the past, but they are not being invited this time in order to get a fresh perspective, consider running the RFP past them to get a sense check.
Realistic tender timescales
This is an important process, and it deserves serious consideration by both the board and the reviewer. If it is rushed, there is the risk of not getting the best out of the process. I was recently recommended as a potential provider for a board review, but the RFP gave only five days (and a complex online procurement process) to submit proposals. I have a day job working for other clients! Reluctantly, I had to forego submitting a proposal.
While we are talking about procurement, if you do use your procurement department to run the process, please make sure they really understand what board reviews entail. It’s not like buying paperclips! I have dealt with some fantastic procurement professionals who really understood the service being procured as well as its importance to the organisation, but this is not always the case.
Review format
Various different components can be included in the board effectiveness reviews, including:
- Questionnaires,
- Interviews,
- Observations,
- Assessments of board information.
Often this is left to the board reviewer to advise on. However, many reviewers won’t pitch if there is not an interview stage, as this is considered such an important component. The Board Effectiveness Guidance states: ‘Questionnaire-based external evaluations are unlikely to get underneath the dynamics in the boardroom’. Like many other reviewers I now believe observations of the board and committees are also very important – how can you realistically asses the dynamics of the board members if you never see them interact together?
Boards should have a very good reason if they want to dispense with the observation stage. An organisation I was asked to submit a proposal for in the security sector refused an observation for reasons of national security ‒ fair enough. But for most organisations an NDA should suffice to secure confidentiality.
One practical point is to provide dates for the observation meetings in the RFP. I know from experience that discovering late in the process that there is a diary clash with observation dates is disruptive to both the board and the reviewer.
Executive committee and stakeholders
The Guidance states that: ‘The external evaluator should also meet with the executive team to gain their views of the board’. Clearly the board members will be interviewed and it is usually easy to identify who these are. However, it is not always as easy to identify the Executive Committee members and regular attendees of the board as well as other stakeholders.
These people will also likely warrant an interview, so it is helpful to provide this information for potential board reviewers up front. This will also save the person commissioning the review having to answer numerous clarification questions!
A related point on interviews is to allow at least an hour with each interviewee if they are to be meaningful, so it is worth advising board members and executives accordingly.
‘Light touch’
Many of us in the board review world cringe when we are told the client wants a ‘light-touch review’. I am often tempted to reply by saying ‘Would you appoint a light touch non-exec?’ but have resisted the temptation ‒ until now!
If there are aspects of the review the board wants to major on then make this clear in the RFP. I once saw a client stipulate that the final report should be no longer than ten pages. Very precise. To be frank, if the board reviewer is doing the job effectively, it isn’t really a light touch exercise – indeed, when I have won mandates where this has been specified, it takes just as much work as any other review.
Selection process
When boards are selecting a board reviewer, it is really important that there is an interview process for selection purposes. There normally is, but not always. On one board review I was asked to pitch for the selection was a purely paper exercise, without any board members meeting the potential reviewer.
Importantly, as the Guidance makes clear: ‘The Chair is responsible for making sure the board gets the most from any externally facilitated board evaluations and should ensure it is not approached as a compliance exercise’. As such, while most of my day-to-day dealings when I am undertaking a board review are with the company secretary, this process should be owned by the Chair, or alternatively under some circumstances, the Senior Independent Director.
I recall interviewing to undertake a board effectiveness review for a bank where I had a series of interviews with procurement and the company secretarial team. These were all challenging but constructive ‒ indeed, as I was told, this was a really important appointment for the board: they wanted someone they could work with but who would be completely independent. The Chair insisted on a face-to-face interview with me at the final stage before making the decision to appoint me. The whole process had been professional and rigorous.
Exploring the experience and qualities of potential reviewers would take another full article, but suffice to say that finding an individual or firm with a range of skills is important. During my career I have witnessed a shift in focus from the process of governance to behaviours and dynamics. And rightly so. Finding someone who can cover all the relevant areas is important and can be difficult. It is one of the reasons why I believe board effectiveness reviews are challenging, albeit enjoyable projects, as there are so many skills and components involved.
Scoping
Finally, once boards have selected their reviewer, it is important to scope the review carefully at the beginning to ensure there are no misunderstandings and that everyone is working to the same objectives. It is similar to contracting in coaching. The scoping document is an important document ‒ indeed, in certain sectors such as financial services, the regulators may well want to have sight of and comment on it before any substantive work takes place. As such, it clearly needs to be produced at the very start of the process.
As well as the main components of the review, it should also include the proposed timetable. In my experience, board effectiveness reviews work best over a three to four months period: any shorter than this means it will be difficult to get dates for interviews and observations and the process will become rushed; any longer and there is a risk of losing momentum.
NED input and impact
I hope this checklist will help NEDs, and their organisations, to get the best out of their board effectiveness reviews. It is important that NEDs are fully engaged in the process if they are to add value.
This article is adapted from one originally published in Governance Publishing, March 2025, Issue 367
Non-Executive Director Programme
Ian White is the programme director for the Cranfield Non-Executive Director Programme, which offers current and aspiring NEDs the opportunity to learn what’s involved in the legal, regulatory and governance of boards.
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