“This year our board evaluation is required to be externally facilitated. Does anybody have any recent experience with external providers, in particular who was used and whether the evaluation was questionnaire or interview based?
Any additional insights into the process would also be welcome.”
At my previous company and more recently at my current company we have used Keith McCambridge (and Stuart O’Reilly for the most recent) from Wickland Westcott.
Maybe not quite as well known as other providers but on both occasions they made the chairman feel that they could provide the right level of engagement, identify appropriate matters for consdieration and work with the Board rather than against it.
The porcess was a simple questionnaire, which was agreed with the Co Sec and the Chairman, designed to elicit areas of focus ahead of individual interviews and feedback session at the Board. We were looking for ‘what we might have missed’ rather than a fundamental top to bottom review and they did it well.
We have used David Mensley and Equity Communications for a number of years. We like his very flexible approach to accommodating our needs and he has undertaken both a questionnaire and interview based Board evaluation process for us.As the FTSE100 response below noted, we definitely get the feeling that Equity Communications are assisting our evaluation rather than performing an evaluation on the Board.The relationship EquityCommunications have built with our Board has allowed the Board to be very open in their responses and, looking back, we have seen an enhancement in the way we have operated as a Board since Equity Communications first undertook an evaluation exercise for us. As for additional insights: I would echo one comment made below, it is essential to have your Chairman’s support for this exercise (a point which David has always stressed to us); and I personally feel that if this is your first ‘externally facilitated’ exercise the ‘safer’ approach would be to use a questionnaire rather than an interview based method.
We have had only one external facilitation so far (in 2010) and used Sheena Crane who was excellent. It was an interview based process with the questions being agreed with the Chairman in advance. She had regular meetings with the Chairman to update him on progress (all input from individuals was fed back on an anonymous basis) and also sat in on a Board meeting. I was present at all the meetings with the Chairman. Last year I (as CoSec) conducted a similar interview based process with the Directors and will do the same this year. We will do an external evaluation next year. The Directors appear happy with both arrangements (ie internal and external) and are not inhibited in giving their views. For some years there had been some scepticism about using an external provider but this is no longer an issue, no doubt due to their confidence in the provider selected.
David Mensley carried out our external board evaluation. It was a very bespoke and well crafted questionnaire based approach which was relevant to the issues that the board were facing . The company had a new board and some difficult issues to lay on the table which David teased out of them in a very professional manner. The independent confidential aspects of this external approach allowed board members to be frank in their responses giving the Chairman a true idea of the issues and actions required to acheive a more coherant working relationship between board members going forward.I would most certainly recommend this method of evaluation.
We are currently mid RFP for an external provider – the RFP being sent to the usual firms. We are proposing questionnaires and interviews of directors and the CoSec. We are not proposing interviews of senior executives or Board meeting attendance but are keeping an open mind should the chosen firm persuade the chairman of their values. One point to note is that most companies with December year ends choose to have their evaluations undertaken during the Q4 board cyle and so some of the preferred firms are often stretched during that period. We have had one firm decline to participate due to existing commitments.
When you say “required” I assume the you refer to B.6.2 of the Code, ” Evaluation of the board of FTSE350 companies should be externally facilitated at least every 3 years.” Based on that assumption, rather than any other source of compulsion, I would comment that:
1. The comply or explain rule applies, ie your company can choose not to have an externally facilitated evaluation (or indeed any evaluation!) it would simply need to explain why it does not choose to do so.
2. Determine what your chairman wishes to do. Any evaluation process requires the support of the chairman, without which it will deliver little or no benefit. A number of external providers will not engage with companies without that support.
3. Assuming your chairman wants to do something, how much does he want to spend? Questionaire based evaluations are of course much cheaper than interview based.Choice of supplier will also significantly impact on cost.
Other respondents have thrown various supplier names into the ring, so i wont add to those. My key suggestion is to discuss the matter with your chairman asap to get a steer as to what is wanted and what would be supported.
We have always had externally facilitated board evaluations. We use a mix of questionnaire and interview based approaches. The latest interview based evaluation was last year and we used Peter Hogarth at JCA Group. This involved the directors completing questionnaires which were then used as the basis for interviews. JCA also attended a Board meeting. This evaluation was very thorough but Directors did find it quite intrusive. My feeling is that this type of evaluation would be extremely beneficial if a Board had issues that needed exploring or if there have been significant changes to the Board. However, I feel that for a relatively stable Board with no issues the additional benefit over a purely questionnaire based approach may be marginal.
This year we used David Mensley for a questionnaire based approach, which we have used roughly two years out of three for the past ten years or so.
This duel approach helps bring different perspectives to the evaluations which we find very valuable. However, having the common factor of David’s questionnaire based approach also helps to identify trends, improvements etc over time.
The Directors tend to prefer David’s approach as they find it less intrusive and less time consuming. The questionnaires are, however, carefully crafted to look at any areas of potential concern; changes to processes etc, therefore the Directors still feel that everything is covered.
Over the years we have looked at a number of other provides, however, with Peter and especially David we feel that it is our evaluation they are assisting with rather than the facilitators evaluation being performed on our Board.
The company I was previously at looked into a few providers – ICSA Board Evaluation, Equity Communications, Socia, Independent Audit, Armstrong Bonham Carter. All offered similar services using a combination of interviews and questionnaires.
The questionnaire covered board processes e.g. corporate governance code, company specific themes, corporate risk and issues faced in the prior year. This then formed the basis of one on one interviews with the directors and company secretary.
Although not taken up there was also an option to have the provider observe the Board meeting process as part of the review in action and then attend a Board meeting to facilitate discussion to review findings and agree any follow up actions.
We have used Tracy Long of Boardroom Revoew for two evaluations but may be inclined to use a different provider next time in order to get a different perpsective. My board has reservations about using the groups attached to headhunters. Sheena Crane was highly recommended for her work on another FTSE.
We externally facilitated our Board evaluation last year. We shortlisted and interviewed the external provisders before picking one. The evaluation was intereview based. our experience was very good. Can provide more info if needed.
We used Lintstock for our last external review. The process involved the completion of a questionnaire which was focused on a number of key themes and issues faced in the prior year. This then formed the basis of one on one interviews with each Director and a number of senior managers.
We used Tracy Long at Boardroom Review. She interviews each board member after being briefed on the background of the Group and any specific areas to “probe”. It’s quite an expensive process (£5-6k per head) so probably more worthwhile when there are issues to air or succession planning on the horizon. A final report is presented to the Board (in writing and in person) having discussed the results with the Chairman in advance. Any really sensitive matters may not make it into the written report.
We have twiced used Egon Zehnderand found them very good. They used interviews and then presented a report at a board meeting