Board Enhancement and Maturity
Introduction to the Board Maturity Benchmark Model
Effective Governance has reviewed over 500 boards in the last decade. From these reviews, we have identified the need for a way to quantitatively compare their performance with boards at a similar stage of maturity and to provide a road map for improvement. Our Board Maturity Benchmark Assessment offers such an approach.
A maturity model is a two dimensional structured approach for describing the principal characteristics of an organisation or a project at various stages of maturity. A powerful feature of such models is that it is quite easy to assess an organisation’s current level of performance by matching it with one of the typical behaviours in a grid. An equally powerful feature is that it is very easy to see what the organisation needs to do next in order to improve its performance. It also allows an organisation to benchmark its level of maturity against other organisations, because those making the assessments have a common understanding of what constitutes a particular level of performance against each measurement category.
The first dimension of Board Maturity Benchmark Model consists of five stages ranging from the formative stage progressing through to an leading practice stage where leading practices are followed or established. As illustrated below, each stage builds upon and incorporates the requirements of the preceding stages.
Board Maturity Benchmark Assessment: CEO Evaluation Example
The second dimension of our model involves the 20 key areas we use for evaluation. Each is drawn from the board environment including: strategy: CEO selection, monitoring and evaluation; monitoring; risk management; compliance; policy framework; networking; stakeholder communication; decision making; effective governance; board competencies; board behaviours; and board structures. In the grid below, we use CEO evaluation as our example.
Using the Board Maturity Benchmark Assessment, it becomes quite straightforward for a company secretary to determine not only the current stage of maturity in each key area, but also provide this to directors to gain consensus on the desired target stage. In the example below the company secretary has evidence that the board’s role and frequency in CEO performance evaluation is at a developing stage, yet there is no documentation of the process i.e. formative. We then determine the overall current effectiveness by aggregating the company secretary responses. With this information the directors are asked to reflect upon the company secretary response and the calculated current effectiveness and determine which level they would like to target for each of the 20 dimensions (i.e. 20 questions in total). In order to progress to the targeted stage, the board through the company secretary would need to remedy any shortfalls.
Dimension: CEO Performance Evaluation
Effective Governance is the only provider in Australia and New Zealand of a Quantitative Board Maturity Benchmark Assessment that will provide assurances to Shareholders and Stakeholders of the maturity of the Boards Governance.