The Board Meeting Audit Is a Vital Part of the Board Evaluation
The objective of a Board evaluation is to identify opportunities for improving governance effectiveness. A key step in any Board evaluation process is the Board meeting audit. For most Boards, the Board meeting is a central pillar of their governance process. It is where the Board spends most of its time on oversight of the organization.
Board meeting audits are best conducted by knowledgeable, objective outsiders. A self-audit is difficult unless the person doing the audit is a governance expert. Being objective is also important as Board’s consistently over-rate their own performance for some very logical reasons.
What makes a Board meeting audit such an effective part of the Board evaluation is the efficient, real-time insight it provides on all elements of the Board’s effectiveness.
Here are some common Board meeting audit observations:
The Board is too focused on operations. Too much time and too many decisions are operations, not oversight related.
The CEO controls the governance process. From setting the agenda to leading the discussions and decision making in the meeting the CEO has greater influence over outcomes than the Board Chair.
More time needs to be spent on non-financial risk. All Boards gravitate toward financial reporting and associated risk. Not enough receive intelligence about market and operating risks.
Directors need better preparation for the oversight decisions they are making. This includes better training, better information better advance preparation.
The Board meeting audit can be conducted as part of a full Board evaluation or independently. Conducting a Board meeting audit is a very efficient way to do a Board ‘check-up’.
Here is what clients say the impact has been as a result of one or more Board meeting audits.
“We took our Board meeting time down from eight hours to less than four.”
“We reduced the number of Board meetings from twelve(!) to six”.
“I am a much better Board Chair. I understand my role now and I have a lot more confidence in how to lead the Board meeting process.”
“We stay out of operations now. In the past, that is all we did.”
“We are much better prepared for our meetings now. In the past we got too much information and it wasn’t helpful. Now I don’t mind preparing for a Board meeting.”
More Information on the Board Evaluation Process and Board Audit
Jim Crocker is the founder and Chair of Boardroom Metrics. He is an experienced Director, CEO and Consultant to public, private and not-for-profit organizations. Jim facilitates and works with Boards, CEO’s and Leadership teams on governance effectiveness.