Benefits of a Board Evaluation for Corporate Organizations
Best practices in corporate governance are essential to building a strong board of directors for any business or organization, including startups and mid-sized technology companies. In order to implement these “best practices,” it is beneficial for boards to undergo an evaluation process to identify areas of potential improvement. Not only will this process strengthen the board, but startup investors and stakeholders take notice of leadership that seeks to consistently grow and improve.
Mary Musacchia, as Managing Director of Center for Board Excellence and of counsel to Whitmeyer Tuffin, suggests these specific benefits of such an evaluation for both the board itself as well as the organization as a whole.
Corporate governance sets the tone and culture of the firm directly from the top. Leadership roles within the board should be agreed upon and encouraged, and strong leadership demonstrates to the individual directors a commitment to improvement.
2. Role Clarity
Similar to defining leadership, role clarity enables a clear distinction between the roles of the CEO, management and the board. It clarifies director and committee obligations within the board, as well as duties and expectations of individual directors.
An essential factor of any effective board, teamwork builds trust between board members and encourages their individual involvement. It also fosters healthy relationships between all parties, including the board, management and the CEO.
Accountability goes hand-in-hand with responsibility. A board evaluation can focus on and define the responsibility the board has to the stakeholders as well as the responsibilities (and liabilities) of each director to the board itself.
Effective communication not only builds personal relationships between directors, it also maintains and improves a working relationship between the board and the CEO.
Musacchia serves as Managing Director and Chief Legal Counsel for the Center for Board Excellence, which specializes in measuring and assessing a board’s leadership performance. She has devoted more than 25 years to managing legal issues for corporate organizations.