How Full-Board Evaluations Are Paying Off
from May/June 2007
Just as many directors who’ve been through individual evaluations say the process has been helpful, they and the consultants who work with them have also seen tangible benefits come from evaluating boards as a whole. “If you measure performance, it tends to encourage better performance,” says Thomas Doorley, chairman and CEO of Sage Partners, a management consulting firm in Asheville, North Carolina, and lead director at Natrol Inc., a maker of dietary supplements.Is there one big common lesson emerging from board evaluations? Yes, says David Nadler, chairman of Mercer Delta Organizational Consulting. He estimates that about three-quarters of the boards conclude that they’re spending too much time listening to presentations and not enough time discussing issues raised by those presentations. Recognizing this helps push them to change, he says.
Nadler adds that many boards also wind up rethinking the question of which issues merit their time and attention, “often leading to a radical restructuring of the agenda to take some topics out and add others in.” In many cases, he says, that translates to a sharper focus on corporate strategy. Other outcomes of whole-board evaluations:
- MortgageIT Holdings Inc., a residential mortgage banker in New York City, changed the composition and frequency of committee meetings, along with how they were recorded. “We marginally increased the number of meetings, and we made them more formal,” says director Timothy Schantz, 55, formerly head of structured lending for Deutsche Bank in New York. As part of the change, he says, minutes of committee meetings are now more readily available to the whole board, and a summary of the committee meetings held between full board sessions is reported to all directors.
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The board of Affiliated Computer Services Inc. in Dallas agreed to name an independent lead director in 2005, in part because of insights that came out of a board review, according to director Dennis McCuistion, 64, president of his own management consulting firm in Denison, Texas. The job was given to Joseph O’Neill, 59, a director since 1994 and the CEO of Public Strategies Washington Inc., a consulting firm in the nation’s capital.
- Directors of Federal Signal Corp., which manufactures fire and rescue trucks and other specialty vehicles in Oak Brook, Illinois, made it clear by way of a board evaluation that they wanted to spend more time on the company’s long-term business strategy. As a result, Robert Welding, 58, the CEO and a member of the board, added an extra day to one of the board’s meetings each year, devoting it exclusively to this subject.
