APPRAISING BOARDROOM PERFORMANCE

Rare is the company that does not periodically review the performance of its staff, business units, and suppliers. But rare, as well, is the company that does such a review of one of its most important contribu tors - its board of directors. Reviewing a board's performance is not an easy proposition: it has to be done by the members themselves, peop le who generally have many other responsibilities and whose time is al ways at a premium. But done properly, appraisals can help boards becom e more effective by clarifying individual and collective responsibilit ies. They can help improve the working relationship between a company' s board and its senior management. They can help ensure a healthy bala nce of power between the board and the CEO. And, once in place, an app raisal process is difficult to dismantle, making it harder for a new C EO to dominate a board or avoid being held accountable for poor perfor mance. Done properly is the key here, though. Done incorrectly, board appraisals can degenerate into self-serving evaluations or unpleasant, time-wasting exercises. Worse, they can evolve into rigid mechanical processes that discourage innovation. In fact, all of the approaches t he authors observed in two years of research were incomplete. The auth ors have therefore drawn on the strengths of several different approac hes to synthesize a best-practice process that is both rigorous and co mprehensive.