Evaluation of the Board of Directors
In an increasingly complex business environment, companies face challenges that need to be addressed from multiple perspectives.
Challenges of digital transformation (where cybersecurity occupies a relevant place), regulatory changes, the new geopolitical context, force companies to count on better prepared Boards of Directors, with more experience, greater competences, more diverse and with more resources to execute their supervisory function with greater success guarantee.
Likewise, there is a greater awareness of the need to have more pluralistic government bodies with new capacities and knowledge to take decisions on complex issues.
Along these lines, over the last few years, we have seen in Spain an increase in the incorporation of independent board members to the Board, as well as a better functioning of the Boards of Directors, which has implied a significant increase in companies who opt for external evaluations.
In this sense, one of the areas in which both the Code of Good Governance and the Corporate Enterprises Act clearly insists on the evaluation of the Board and its committees. This law indicates that an evaluation should be carried out each year to establish action plans for improvement.
The evaluation of the Board of Directors is an instrument of good governance whose use can bring benefits to the company, since it helps to improve the functioning and efficiency of its Board, through the implementation of recommendations and principles of good governance that facilitate the achievement of most objectives pursued by the companies.
Recarte & Fontenla will help your company answer the following questions:
- What should be the functioning and composition of the Board of Directors and how should it be adapted to the company's strategy?
- What should be the profile of the independent board members?
- Does your Board of Directors have the necessary elements to add value to the decision-making process?
- How much time should be dedicated to the debate?
- Does the Board have a procedure to evaluate its operation on a regular basis?
- Is the power of the Executive Chairmen well balanced?
- How much importance does the board grant to Corporate Social Responsibility?