Maximising Value of Board Performance Assessments from GOVERNANCE PARK by SKILLSPEAK
In my opportunities to be a Conference Exhibitor, I have the pleasure of meeting up again with many of the clients I have served during the 7 years I have been offering Board performance assessments. What I learn from these occasions is that it’s never too late to learn. I have learned there is no uniform, clear idea of where my service fits in to the scheme of things. This paper aims to clarify the real nature of assessment services and answer your frequently asked questions. Of course, I would hope this will lead to more value for you in using the services in future.
We know that as regulated organisations, we must evaluate our Boards annually and that APRA (and ASIC) will require us to demonstrate that a suitable evaluation has been conducted. APRA does not exclude a requirement to see your results. This begs the question of what constitutes a suitable assessment. I trust the following will be of assistance in positioning you to meet your obligations. You should also expect to achieve this with the minimum of disruption to your Board operations but delivering the maximum in value and helpful information.
Review of assessment options (Inclusion in the following list does not imply that any of these options is more or less acceptable in complying with APRA’s requirements)
- Self-Assessment via scheduled discussion in a special minuted Board meeting – This is the simplest of the available methods. While this could be a healthy exercise for any Board to do regularly, it is highly unlikely to be comprehensive, accurate and objective or lead to action plans to deliver real improvement outcomes. This could be a suitable exercise in support of an assessment process or in reviewing the results of a more detailed and formal process.
- Internal Assessment – There are some confusing definitions of what is actually meant by “internal”. It could either be defined as “no external cost” exercise or else “no external advice”. If it is seen as an expense issue, it should at least be acknowledged that the opportunity cost of having the Chair or a Director process the results is significant and often has to be cut short because of lack of time. The other impact is that while processed by an internal person, there will always be some participants not willing to disclose their true opinions and confidentiality may be seriously exposed. If the “no external advice” definition is used, it means that the Board in that year is not seeking any external consultant intervention in terms of remedies, expert observation, review or specialist training.
- External Assessment – The most likely definition is that in this style of assessment, the entire process is managed by an external consultant. It may include a preliminary self-assessment but exists mainly as a process whereby the consultant will study the organisation, attend meetings, interview directors, review policies and procedures and check all aspects of operations from a diagnostics and remedies point of view.
- Benchmarks – Boards have no natural evaluation authority. They do not work for a superior, unless it is the stakeholders or members/shareholders. This limits their opportunity to be objectively assessed. To determine if they are approaching State of the Art performance, they can test their levels on all of their responsibilities compared to the practices of like Boards. The reason to include benchmarking in assessments is to assist in prioritising possible remedial actions. It is particularly important to take more immediate action when a particular area of responsibility fares relatively poorly by comparison.
How Objective Is Self-Assessment?
Most people approach the assessment process from a standpoint of genuine desire to improve performance and to be the best they can be. It is true that sometimes, ratings will be higher because people often perceive things are better than they actually are. The key though is that the assessment still serves its purpose because relative to their own standard, a Board’s change in performance will clearly be in evidence.
When any individual offers an opinion on the performance of another, it is naturally subjective. This simply means subject to one’s life experiences, observations and view of standards to be achieved. As long as it is an honestly-held opinion as reported, it has significant value when analysed as an aggregate with the opinions of others. It is important that no single evaluator’s opinion is revealed or used in any standalone capacity.
The other major factor in delivering objective opinion where the inputs are subjective is in the use of our elaborate privacy provisions.
Where Do Assessments From Skillspeak Fit In?
The team at Skillspeak, while external to your Board, do not deliver External assessments but rather offer support for them. Skillspeak is an automated tool for the purpose of processing the metrics associated with assessments of Boards. We are a specialised data centre facility for delivering results from Board assessment surveys. This essentially eliminates the work component of the processing steps and frees you to focus on the results. We can even work with Boards to process results from many different forms of survey input including where the paper survey has already been conducted internally. You can simply outsource the laborious processing work to us. Of course, we can also manage the whole process for you.
To gain a better understanding of where Skillspeak fits, consider the role of MRI X-Rays in modern medicine. The availability of these magic pictures has revolutionised the diagnosis of problems and provided accurate guide maps for surgeons in subsequent operations. Skillspeak works in a similar way, giving those who will develop action plans for you access to your results. These are freely available for this purpose, given that you clear them for release. This can be for an internal project or when you use any external consultant. Now you can take advantage of our comprehensive analysis to ensure the success of any consulting engagement you select. We will work with all consultants given they sign a non-disclosure statement protecting your privacy and our intellectual property.
Of course, our standard service remains a fully-managed, automated self-assessment process. This starts with our exclusive and proven set of governance measurement standards and uses all our processing capability to deliver capable, reliable, accurate, comprehensive and objective results.
What is Delivered in a Typical GOVERNANCE PARK by SKILLSPEAK Assessment?
Board performance assessments include evaluation of any or all of:
- The Board
- Each Director from a peer review
- The Chair
- The CEO
- Each Committee
- Any other executive considered a support to the Board’s operation
Reports include :
- The Flash Report (Executive Summary)
- Assessment detailed results
- Analysis against targets
- Concerns and strengths
- Qualitative content as a guide to action plans
- Assessment summary matrix
- Consensus maps
- Trend reports
- Graphical summaries
- Benchmark position
- Feedback Summary highlighting the recommended focus areas
- Chair’s range analysis of Director performance
The unique statistical treatment of results ensures you will quickly be able to find those key action plan items which require your immediate attention.
What About Benchmarking?
Skillspeak delivers an unprecedented benchmarking service. It works in two modes :
- Previous assessment results are aggregated to determine the accurate level of performance being generally achieved in a particular area of responsibility. In order to lift the performance level of all of our clients, we apply a stretch factor to these ratings and these are used as the dynamic target for any assessment we conduct. This has the effect of strongly incenting Boards to improve their performance rapidly to a level which can be considered a position of leadership.
- Every individual area measured is assigned a rank when compared to the range of performance by other Boards. These are selected from a scale of Exemplar, Advanced, Satisfactory, Needs More Effort and Needs Much More Effort.
GOVERNANCE PARK by SKILLSPEAK – Achieving the Highest Standard in Quality
Steps in Delivering Objectivity:
- The standards being measured are objectively stated with one single question for all “How well is (the subject) performing responsibilities in the area of (the object)?”
- All participants respond with an independently selected rating. There is no group vote and ratings are gathered by secret ballot. Board members frequently remark that after a Skillspeak assessment, the first revelation is that they are seeing real opinions reflected for the first time.
- Rich commenting is facilitated and encouraged to help flesh out any issues.
- In reporting, higher priority is given to ratings which reflect strong agreement across participants. Other items are listed as supplementary points to consider.
- Performance reports are accessible only by the person assessed. All are also permitted to see the Board results though. This ensures privacy is maintained throughout the process and encourages free and honest participation. In privacy distribution mode, all are encouraged to volunteer to review their results with a superior. Please note that with a unanimous Board resolution, we can vary this method to allow the Chair to see all results.
How Do You Get the Best From GOVERNANCE PARK by SKILLSPEAK ?
You should be requesting an assessment each year so that you can take advantage of the powerful trend analysis and benchmark facilities. To achieve Continuous Quality Improvement, repeated usage is essential. In some of these continuous years, you will be conducting Internal assessments and some will be your External years. Regardless of the style of assessment you have selected, you need our assessment services to underpin the process. In âInternalâ years, we will do all the work for you and you can spend your valuable time where it will give you maximum return. This is in processing your results to determine where you will apply correction or re-alignment effort. In External years, we welcome making our results suite available to your nominated external consultant.
The other major advantage you will gain is a scorecard to share with stakeholders, regulators and other interested parties, clearly demonstrating your steady and consistent improvement over time. Annual assessment is the very best way to reinforce your commitment. It will ensure you have rich information you will need to take appropriate actions whenever these are required to improve the workings of your Board.
How is the GOVERNANCE PARK by SKILLSPEAK Model Changing to Support You?
We are committed to offering our service in ways to support its most effective use. We have focused our business model to allow you to achieve your objectives with the minimum use of your valuable time and the lowest possible cost.
Effective immediately, our service is priced to encourage continuous use. We will never apply a price increase for Board Assessment services where the service each year is scheduled within 13 months of the date of the previous year’s assessment. You will enjoy the same low, initial price for the duration of the delivery of continuous annual assessments. The only time you will pay more is if you choose to take more of our services from time to time. These prices will also then enjoy fixed levels for continued annual use of any new service.
We would be delighted to provide details on request. For further information, please contact us by email firstname.lastname@example.org or call Len Norman on (02) 8765 9876 or 0413 028 195.