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CORPORATE GOVERNANCE

Reasons for Self Evaluation by Board:


To identify various sources of failures like:
a.
b.
c.
d.

Strategic failure
Control failure
Ethical failure
Interpersonal relationship failure

Further, board carries out self-evaluation due to increasing demand for corporate performance, rise in shareholders
activism, and increasing media and community scrutiny of aspects of corporate life.
Objectives and Scope of Self Evaluation
To establish what it hopes to achieve (corporate leadership or problem resolution), and scope of review (availability
of sufficient resources)
To be included in Self-Evaluation:
1.
2.

Internal Evaluations (Board as a whole (board committees), individual directors, and key governance
personnel (CEO and Corporate/company secretary)
External Evaluations (Shareholders, Government, Customers/Suppliers, Other stakeholders)

Areas to be evaluated:
To be problem specific, identify root causes of problems, tests the practicality of specific governance solutions.
Governance roles (roles and responsibility), Improving board processes, Key board functions, Continuing
improvement, Relationships, Accomplishments, goals and objectives, mission, policies, confidence, performance,
productivity, stability vs change.
Techniques to be used:
1.

Qualitative Techniques
Interviews (Group or individual), Observations, Document analysis

2.

Quantitative Techniques
Surveys (face to face, telephone, mail, email, internet)
Topic

Criteria Items

Defining Roles of Governance


Is the role of a board member clearly defined and understood?
Boards Role
Does the talent spread within the board reflect the companys needs and
necessities?
Is there exist sufficient board members to carry out the work required?
Do all board members bring valuable skills and experience to the company?
Improving board processes
Structure of Board

Board meetings

Does documentation done by board cover the correct amount and type of
information?
Are board members conscientious in preparing for meetings?
Are company related materials discussed and reviewed in a structured manner?

Key board functions


Strategy

Does the mission, vision, and strategies are well understood and clearly defined?
Is the board have knowledge about emerging trends, issues, and changing patterns
of market in which the company performs?
SARFRAZ ALI SHAHANI

CORPORATE GOVERNANCE

Does the board clearly understands the business it is governing?


Do board members actively participate and keep engaged in building networks that
Service/advice/
would benefit the company?
Contacts
Does the board have sufficient skills and competencies to govern its responsibilities
and build standards against which to match their performance?
Monitoring
Is there exist detailed standards, and operation procedures for reporting and
Compliance
compliance
Do
the boardsystems?
members aware of their risk assessment duties, and risk behind
Risk
strategies
they
suggest information
for corporateregarding
governance?
Do
there
exist
detailed
identifying, and managing business
management
risk?
Continuing improvement
Director
development
Director
selection and
induction

Is there any mechanism and policies that could encourage board members to pursue
opportunities for personal development?
Do the board members carry out succession planning for chairperson, and for its
member effectively?
Do the board guidelines include well defined and understood policies and
procedures to select and induct members?

Reference:
1.
2.
3.

Genome Canada BOD Assessment, 2008


Kiel, Geoffrey C and Nicholson, Gavin J (2005) Evaluating Boards and Directors.
Corporate Governance: An International Review 13(5):pp. 613-631.
Guidelines for establishing a Board Self Evaluation, Excellence Committee, Illinois Community College
Trustees Association,

SARFRAZ ALI SHAHANI