As a Teaching Fellow of the Institute of Corporate Directors (ICD), I have been ingrained with the fine teachings of no less than Dr. Jesus Estanislao, the founder and chairman emeritus of ICD. Among many of his teachings, there exists a triumvirate of themes that Boards of Directors should have in mind that are essential to excel for long term success: Conformance, Performance and Sustainability.
Simple, clear, true… and in today’s dynamic and increasingly complex corporate environment, where the role of the Board of Directors has never been more critical, one wherein expectations are at an all-time high and with no stopping the trend towards increasing expectations on strategic direction, stewardship, and oversight functions. To meet this inevitable challenge, pragmatic chairpersons turn to Board Assessments and Third-Party Evaluations as essential components of a mature governance framework.
And so, a Board’s effectiveness has a direct impact on an organization’s sustainability, strategic outcomes, risk management, leadership development and stakeholder trust. Unlike operational or financial performance, however, board effectiveness is more difficult to measure and evaluate internally without bias. Self-assessments can be valuable, but they often fall short in uncovering structural inefficiencies, interpersonal dynamics or latent risks. This is where third-party evaluations become invaluable.
Third-party evaluations provide an independent, objective, and expert view of board dynamics, composition, and governance practices. They bring independent insights in terms of structure, processes, dynamics, roles and overall performance — all benchmarked with global best practices and used to compare relative to best-in-class Boards of peers and competitors. This independence fosters honest feedback, uncovers blind spots, and enhances the board’s credibility with stakeholders — particularly shareholders, regulators, and investors.
Reputable board advisors across the globe follow structured, evidence-based methodologies for evaluating board performance. These generally include the following elements:
Customized Frameworks: Leading advisors design frameworks based on recognized governance codes such as ICD’s ASEAN Corporate Governance Scorecard.
360-Degree Diagnostic: Comprehensive evaluations covering board composition, meeting effectiveness, risk governance, and stakeholder engagement.
Peer and Self-Ratings: These tools allow directors to evaluate themselves and one another across key criteria, providing a holistic view of collective and individual performance.
Governance Scorecards: The use of governance scorecards to assess how the board performs across globally accepted pillars such as transparency, accountability, fairness, and responsibility.
Actionable Debriefs: Findings are presented in closed-door, executive briefings where insights are discussed with the chair and the full board. Leading advisors emphasize a culture of improvement.
What should a board expect from a world-class third-party evaluation? The following are standard deliverables from reputable global board advisory firms:
Board Effectiveness Report: A detailed narrative that includes findings, interpretations, and benchmarking data. This document reflects the board’s current performance across critical governance areas.
Individual Director Feedback: Confidential feedback provided to each director, often as part of a one-on-one conversation or written report. This strengthens director accountability and supports development.
Governance Maturity Model: A visual representation of where the board stands on a scale of governance excellence, often broken into levels such as basic, compliant, advanced, and strategic.
Recommendations and Roadmap: Clear, prioritized actions aimed at improving structure, process, and behaviors — ranging from succession planning and board education to restructuring committees or redefining board mandates.
Presentation to the Board: A concise, facilitative session where key themes are explored and questions are addressed. This ensures understanding and commitment from the board.
Monitoring and Board Advisory: The key to ensure that improvement actions are implemented and sustained over time.
As part of the broader corporate governance landscape, these assessments help build better boards — ones that are agile, informed, and capable of stewarding their organizations through today’s risks and tomorrow’s opportunities.
The ICD’s Third Party Board evaluation is one worth considering for mid-size private corporations to those listed in the Philippine Stock Exchange. After all, is it not worth reflecting, reviewing and validating your Board’s structure and composition; roles and accountabilities; processes and dynamics? Amen to that…