EDITORIAL: EFFECTIVE BOARD REVIEWS

Undoubtedly, an effective external board review can be of enormous use and value to both the board and the organisation.

But what makes an effective board review? Certainly, it is not only down to the quality of the external reviewer, although using a top-quality reviewer is vital. It is also down to the attitudes of the Chair and the entire board. To gain maximum benefit, every board member needs to go into the process with an open mind, honesty, transparency and a willingness to consider any perceived criticisms and suggestions for improvements in the spirit in which they are offered and to take into account recommendations.

This is why it is interesting that the Corporate Governance Institute of the UK and Ireland (CGIUKI) have not only reviewed the draft Code of Practice for board reviewers that they published in 2021 in response to a request from the (then) Department for Business, Energy and Industrial Strategy but have also published two other, related, documents:

• Principles of Good Practice for listed companies using external board reviewers; and 

• Reporting on board performance reviews: Guidance for listed companies.

The principles of good practice outline how an organisation should engage with its reviewer to achieve the maximum benefit from the engagement and give assurance to its stakeholders. The guidance on reporting is intended to balance the information requirements of the organisation’s stakeholders against the board’s legitimate desire to avoid breaching confidentiality.

They are also introducing accreditation for board reviewers, whether individuals or organisations. Applications for accreditation will require evidence of the review processes and procedures used. Once approved, the reviewer will be added to the Accredited Board Performance Review Directory hosted on the CGIUKI website.

You can find further information about this initiative here.