Board Performance: What Makes an Effective Board

Board Performance: What Makes an Effective Board

Most boards go through the motions of evaluation without actually improving how they work. Here's what separates high-performing boards from those just ticking compliance boxes—and how to move from one to the other.

By Craig Fearn •

The chair who asked for my help had run out of patience. Her board met regularly. Checked all the governance boxes. Had the right committee structure. Conducted annual evaluations as required.

But they weren’t actually effective.

Meetings felt like performances—everyone presenting their best selves, nobody really challenging. Important decisions got delayed. Strategic conversations stayed surface-level. Board papers arrived late, got skimmed, rarely prompted real discussion. The NEDs were capable people who individually understood governance. Collectively, they weren’t gelling into an effective board.

“We’re going through the motions,” she told me. “I need us to actually perform.”

After seventeen years working at board level—NHS trusts, tech scale-ups, everything in between—I’ve seen this pattern repeatedly. Boards that look good on paper but don’t actually perform well. And I’ve seen the opposite: boards that might not tick every governance box but achieve genuinely effective oversight and strategic contribution.

The difference isn’t about structure or compliance. It’s about culture, relationships, behaviors, and a genuine commitment to improving performance rather than just evaluating it.

What Board Effectiveness Actually Means

Before we talk about measurement and improvement, let’s be clear about what effective boards actually do.

They provide strategic oversight—not managing operations but ensuring strategy is sound, risks are understood, and resources align with priorities. They exercise proper scrutiny of management while maintaining constructive relationships. They ask difficult questions. Challenge assumptions. Provide independent judgment even when that creates tension.

Effective boards govern risk properly—not trying to eliminate all risk but understanding significant risks, ensuring appropriate mitigations exist, and making informed decisions about acceptable risk levels.

They support succession planning and talent development. Ensure the organization has the leadership it needs to execute strategy.

Effective boards bring diverse perspectives and expertise that complement management. They open doors, provide connections, share experience from other contexts that helps the organization navigate challenges.

And they create psychological safety that enables honest conversations about problems, uncertainties, and disagreements. Without this safety, boards default to performance and presentations rather than genuine discussion.

That’s what good looks like. Most boards achieve some of this. Few achieve all of it consistently.

The UK Evaluation Requirements

In the UK, the Corporate Governance Code requires listed companies to undertake formal annual evaluation of the board, its committees, and individual directors. FTSE 350 companies must have an externally facilitated evaluation at least every three years.

The annual report must explain how the evaluation was conducted, describe the external reviewer’s role if used, summarize outcomes and actions, and indicate how results influence board composition and future development.

So if you’re asking “do we need to evaluate board performance?”—yes, if you’re listed, it’s required. But that’s not the interesting question.

The interesting questions are: Does evaluation actually improve board performance? Or is it just compliance theater? How do high-performing boards use evaluation to get better? What separates cosmetic reviews from genuinely developmental processes?

Where Most Board Evaluations Go Wrong

I’ve observed several patterns that limit evaluation effectiveness.

Treating it as compliance exercise. Boards go through required motions without genuine commitment to improvement. Questions get asked, responses get summarized, report gets filed. Nothing changes.

Avoiding difficult issues. Evaluations stay polite and surface-level. Nobody raises concerns about board dynamics, ineffective chair, problematic directors, or real obstacles to performance. Uncomfortable truths stay buried.

Focusing on process rather than impact. “Do we get papers in time?” “Do meetings start and end on schedule?” These matter but they’re not what determines board effectiveness. Better question: “Do we actually improve organizational decision-making and risk management?”

Insufficient candor in responses. Directors say what’s expected rather than what they genuinely think. Especially problematic when internal people facilitate evaluation—nobody wants to create awkwardness.

No meaningful follow-through. Evaluation identifies issues. Board acknowledges them. Then… nothing changes. Actions don’t happen. Problems persist. Next year’s evaluation raises the same concerns.

Chair controls narrative. The chair decides what gets evaluated, how it’s conducted, how results are interpreted. This creates obvious risk—if the chair is part of the problem, evaluation won’t surface that effectively.

When evaluation suffers from these problems, it becomes ritual without benefit. Compliance achieved, performance unchanged.

What High-Performing Boards Do Differently

Boards that genuinely use evaluation to improve performance approach it differently.

They want truth more than comfort. These boards genuinely seek honest feedback about what’s working and what isn’t. The chair models this by explicitly inviting challenge and demonstrating that raising concerns won’t create problems.

They use external facilitation thoughtfully. Not just to meet Code requirements but because external facilitation enables more honest conversation. Good external facilitators create safe space for directors to raise concerns, spot patterns directors might miss, and bring best practice perspective from other boards.

They focus on outcomes, not just process. Evaluation asks: “Are we making this organization better through our governance? Where are we adding genuine value? Where are we falling short?” These questions are harder to answer than “did we follow procedure?” but they’re what actually matters.

They evaluate culture and dynamics. How do board members interact? Is there genuine challenge or polite agreement? Do people feel safe raising concerns? Can we have productive disagreement? These soft factors determine whether boards actually perform.

They act on findings. When evaluation identifies issues, something changes. Board development activities. Changed meeting formats. Different paper approaches. New committee structures. Shifts in chair behavior. Sometimes difficult conversations with underperforming directors. Actions, not just acknowledgment.

They follow through and review progress. At subsequent meetings, the board checks progress on agreed actions. Did we actually change what we said we’d change? Is it having the intended effect? This accountability makes evaluation meaningful.

A Framework for Meaningful Board Evaluation

Based on both research and practical experience, here’s what effective board evaluation looks like.

Start with clear objectives. What do you want evaluation to achieve? Better strategic oversight? Improved risk governance? More effective challenge? Enhanced board dynamics? Clarity about objectives shapes what you evaluate and how.

Use multiple methods. The UK Corporate Governance Code doesn’t prescribe methods. Best practice typically combines questionnaires (enable systematic data collection), one-to-one interviews (surface issues people won’t write down), board discussions (create shared understanding), and sometimes observation (how does the board actually behave in meetings?).

Get the scope right. Comprehensive evaluation covers:

  • Board composition and skills mix
  • Board processes and meeting effectiveness
  • Committee performance
  • Chair effectiveness
  • Individual director contributions
  • Board culture and relationships
  • Strategic oversight and decision-making quality
  • Risk governance
  • Stakeholder relationships

You might not cover everything annually. But rotate through these areas over time.

Ensure psychological safety. For evaluation to surface real issues, directors need to trust that honest feedback won’t create problems. This usually requires confidentiality in how individual responses are handled and visible commitment from chair that challenge is welcomed.

Make externality work for you. If you’re using external facilitation (required for FTSE 350 every three years, good practice for others), choose facilitators who understand both governance and group dynamics. They should challenge as well as document. Bring external perspective. Help boards see what they’re missing.

My own work supporting boards often involves facilitating these evaluations. Not just running questionnaires but helping boards have honest conversations about effectiveness, surface difficult issues, and develop actionable improvement plans. This requires understanding both governance frameworks and organizational dynamics—what makes boards tick and what gets in the way of performance.

Connect evaluation to development. The point of identifying gaps isn’t just to document them. It’s to address them. Board development, director training, changes to how the board operates—these should flow from evaluation findings.

Review and iterate. Evaluation itself should improve over time. What worked in this year’s process? What would make it more valuable? Effective boards treat evaluation as iterative—each cycle builds on learning from previous cycles.

Key Dimensions of Board Performance

When evaluating boards, certain dimensions consistently matter.

Strategic Contribution. Does the board genuinely shape strategy? Or just approve management’s proposals? High-performing boards engage deeply in strategic thinking. They challenge strategic assumptions. Bring diverse perspectives. Ask “what are we missing?” Not just “is this plan coherent?”

Risk Oversight. Does the board understand the organization’s key risks? Are they satisfied risk management approaches are appropriate? Can they explain how they’re governing risk effectively? Weak boards get risk reports they don’t really understand and nod along. Strong boards dig into significant risks and satisfy themselves that governance is sound.

Decision Quality. Do board decisions reflect robust discussion, challenge, and consideration of alternatives? Or do boards rubber-stamp management recommendations? The quality of board deliberation determines decision quality.

Challenge Function. Do NEDs actually challenge management? Constructively but meaningfully? Can they disagree without it becoming personal? Is there sufficient diversity of thought that challenge emerges naturally? Boards that don’t challenge effectively fail in one of their core functions.

Board Dynamics and Culture. How do directors interact? Is there trust? Psychological safety? Can people admit uncertainty or raise concerns? Or does everyone perform competence and avoid difficult topics? Culture determines whether boards can have conversations that matter.

Chair Effectiveness. Does the chair create conditions for effective governance? Facilitate good discussion? Draw out quieter directors? Manage difficult dynamics? Keep meetings focused and productive? Chair effectiveness is often the single biggest determinant of board performance.

Information Quality. Do directors get information they need, when they need it, in forms they can actually use? Papers arriving late or full of unnecessary detail undermine board effectiveness. Good boards demand better.

Improving Board Performance

Once you understand current performance, how do you actually improve?

Address culture issues directly. If board culture isn’t working—people aren’t challenging, psychological safety is low, relationships are strained—you need to address this. Sometimes through facilitated discussion. Sometimes through board coaching or development. Sometimes through changes in board composition. Culture problems don’t fix themselves.

Invest in board development. High-performing boards commit to ongoing development. Not just technical governance training but development of board effectiveness, group dynamics, strategic thinking capability. This can include workshops, facilitated development sessions, or individual executive coaching for directors who need to develop particular capabilities.

Fix structural and process issues. If papers arrive late, fix that. If meetings are inefficiently structured, restructure them. If committees aren’t working properly, redesign committee scope and membership. These issues are easier to address than culture problems and removing them eliminates friction that undermines performance.

Get composition right. Sometimes boards underperform because skills mix is wrong. Missing critical expertise. Lack of diversity creating groupthink. Too many people or too few. When composition is the issue, thoughtful board refreshment and new appointments become necessary.

Strengthen the chair. Since chair effectiveness so significantly affects board performance, investing in chair development can have outsized impact. This might include external coaching, peer networking with other chairs, or facilitated reflection on chair effectiveness.

Change meeting practices. How meetings are structured and run shapes board effectiveness. Some boards benefit from more strategic discussion time and less operational reporting. Some need better pre-reading so meeting time is used for discussion not presentation. Some need different formats—board dinners, site visits, strategy days—that enable different conversations.

Create accountability for improvement. When you identify areas for development, assign clear ownership and timelines. Review progress regularly. Make improvement a board priority, not just an aspiration.

The Role of External Support

Some boards improve performance entirely through internal effort. Others benefit from external support.

External board evaluation (required for FTSE 350 every three years, valuable for others) brings objectivity, best practice perspective, and enables more honest feedback than internal processes typically surface.

Board advisory support can help with designing improvement interventions, facilitating board development, coaching chairs or individual directors, and providing ongoing support as boards work to enhance effectiveness.

Board coaching for individuals or the collective board addresses specific performance issues—developing strategic thinking, improving challenge skills, strengthening chair effectiveness, building board cohesion.

The right external support accelerates improvement by bringing expertise, objectivity, and external perspective boards can’t generate internally.

When Boards Get Serious About Performance

Here’s what I’ve noticed. Boards that genuinely commit to improving effectiveness—not just going through evaluation motions—achieve meaningful improvement within 12-18 months. Better strategic discussions. More effective challenge. Stronger risk governance. Enhanced cohesion and trust.

This improvement shows up in organizational outcomes. Better strategic decisions. Earlier identification of risks and problems. Stronger leadership bench. Improved stakeholder confidence. Organizations governed by high-performing boards simply work better.

The boards that achieve this share certain characteristics: they want truth more than comfort, they act on evaluation findings, they invest in development, and they hold themselves accountable for improving.

The boards that don’t improve? They evaluate because they must. They avoid difficult truths. They don’t follow through on improvement actions. They accept mediocre performance because addressing it feels uncomfortable.

You can guess which approach serves organizations better.

Where to Start

If you’re a chair, NED, or company secretary thinking “our board could perform better,” start with honest assessment. Not formal evaluation yet—just candid reflection. Are we genuinely effective in our governance? Where are we strong? Where are we kidding ourselves? What would it take to improve?

Then decide whether you can surface these issues internally or need external facilitation to create safety for honest conversation.

Design evaluation that will actually tell you useful things—not just compliance questions but genuine inquiry into effectiveness.

Most importantly, commit to acting on what you find. Evaluation without follow-through is worse than no evaluation at all—it demonstrates the board doesn’t take performance seriously.

If you’re working through how to improve board effectiveness or would like external perspective on current performance, a conversation about your specific situation can help clarify the path forward. This work shapes organizational governance quality for years to come. Worth doing properly.

The Standard You Walk Past

There’s a military saying: the standard you walk past is the standard you accept.

When boards accept mediocre performance—meetings that don’t add value, challenge that doesn’t happen, difficult issues that don’t surface—that becomes the standard.

High-performing boards don’t accept this. They’re constantly asking “how do we get better?” They evaluate meaningfully. They act on findings. They hold themselves to high standards because they recognize that governance quality directly affects organizational success.

The gap between effective boards and ineffective ones isn’t ability or good intentions. It’s willingness to honestly assess performance and commit to improvement.

That willingness—or lack of it—shapes everything.

References

About the Author

Craig Fearn is the founder of Lighthouse Mentoring. He holds two Fellowships (FCMI and FRSPH) and serves as an IoD Ambassador. With 17 years of board-level experience across NHS, technology, financial services, and manufacturing, Craig provides strategic guidance on board governance, executive coaching, and organizational wellbeing.

Learn more about Craig →

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