Board Assessment
Board assessments are becoming more common in Australia. They are now regularly undertaken by most listed public companies and are increasingly becoming more common in mid-sized companies, small companies and not-for-profit organisations.
The Australian Stock Exchange (ASX) Corporate Governance Council published the first edition of its Principles of Corporate Governance and Best Practice Recommendations in 2003. Public companies are required to report on the adoption of the principals in their annual reports, or report on why they have not been adopted.
The ASX Corporate Governance Council has published (November 2006) draft updates to the recommendations together with a detailed Explanatory Paper on the changes. The new proposals involve no fundamental alteration of direction but there are many detailed changes which will have to be taken into account by listed companies and which are likely to repay close study by unlisted companies, not-for-profits and government bodies.
The ASX recommendation 2.5 says “The performance of the board should be reviewed regularly against previously agreed measurable and qualitative indicators”.
There are three types of assessment currently in use:-
• quantitative surveys
• qualitative group self-assessment
• qualitative personal interviews
"Assessment is one of the most powerful interventions available for turning a good board into a great board."
"Using internal staff to conduct your assessment is less expensive, but a third party can bring greater expertise and is seen as more candid and objective."
"Critical thinking is heightened if board members are together when asked questions, hearing opinions and questioning each other."
"Because of its sensitive nature, design and implementation of director peer reviews warrant even more care than other aspects of board assessment."
CDA can arrange board assessments for your company. Our experts include Henry Bosch AO and Christopher Peters AM.
Henry Bosch AO is the former Chairman of the National Companies and Securities Commission, Chairman of the Working Group on Corporate Practices and Conduct and Chairman of the committee which produced the Australian Standard on corporate governance. He has been chairman, or a director, of more than thirty companies and other organisations in both the government and private sectors and currently serves on the boards of several companies. Over the last fifteen years he has conducted board assessments in a wide range of organisations, including companies, not-for-profits and government bodies. He has written widely on corporate governance matters, including his books “The Director at Risk”, “Conversations with a New Director” and “Conversations Between Chairmen”.
Christopher Peters AM is Managing Director of Corporate Directors Association of Australia Limited and Managing Director of the Centre for Corporate Governance. He was a member of the Working Group on Corporate Practices and Conduct and a member of the Commonwealth Attorney-General's Legal Advisory Committee on Corporations & Securities and the Commonwealth Attorney-General's Steering Committee on Corporations & Securities which wrote the Corporations Law from 1987-91. He has been chairman, or a director, of many companies and other organisations in both the government and private sectors and currently serves on the boards of three statutory authorities, several companies and several incorporated associations. He is a regular speaker on corporate governance and conducts board assessments for a wide range of organisations. He is an author of a number of publications and papers including the Corporate Directors' Course, Company Director Manual and Collapse Incorporated.
Contact Mr Bosch or Mr Peters by emailing: mail@directors.com.au