Board Effectiveness Evaluator

The board’s performance is integral to the success of the organisation.

In the boardroom of any high performing organisation is an effective board, responsible for providing strategic direction and oversight.

The corporate world is focused on ESG and it is the board that represents the “G” in ESG, having ultimate accountability for the governance frameworks of organisations that they are trusted to oversee.

It is integral that the board has a process in place to test its effectiveness and to facilitate continuous improvement. The ASX Corporate Governance Principles and Recommendations and the Australian Charities and Not-for-profits Commission both recommend that organisations periodically conduct board performance evaluations which should include assessments of individual directors and committees.

What is KPMG’s Board Effectiveness Evaluator?

KPMG have developed a personalised secure digital tool to conduct board, committee and director performance assessments.

The evaluator also incorporates functionality to consider board composition and produce a skills matrix to assess whether the skills on the Board (and Committees) are what is required to deliver on strategic imperatives, highlighting any skills gaps (experience, education or cognitive) to be alleviated through succession planning or professional development.

All survey responses remain confidential and participants anonymity is maintained throughout the performance evaluation.

How does it work?

KPMG’s Board Effectiveness Evaluator is comprised of three modules which may be used together or independently.

Board Effectiveness

Through a questionnaire which explores the board’s effectiveness in each of the four elements of KPMG’s Board Better Practice Framework, the board’s effectiveness in relation to Leadership & Culture; Strategy & Performance; Compliance & Oversight; and Roles & Responsibilities can be compared against the KPMG expectation (benchmark) for similar organisations. Additional questions may be added to gauge the board’s effectiveness in overseeing key areas such as ESG and cyber.
Director Effectiveness

A 360 degree feedback mechanism which helps directors to understand the impact that they have on the board compared to their peers and hence where potential development opportunities exist. Self-assessment as part of the process enables any blind spots to be identified.
Composition Assessment

By comparing the rating provided by each director as to their level of experience, education and cognitive skills in support of the requirements to deliver on strategic imperatives, any skill gaps that can be alleviated through board succession planning or professional development can be identified. Similarly, the information can be overlaid against committee requirements to ensure appropriate composition to support roles defined within charters.