The purpose of the Board Effectiveness evaluation process is multifaceted. Firstly, it seeks to assess the Board’s composition and diversity while ensuring the collective possession of the requisite knowledge and expertise to effectively govern the business. Additionally, this exercise extends to reviewing the composition, effectiveness, and functionality of the Board’s committees.

Formal Board Effectiveness reviews should be conducted at regular intervals. While some jurisdictions grant the Board the discretion to determine the evaluation cycle, the norm is to complete these assessments annually or in response to resignations and vacancy fillings. Notably, specific regulations may prescribe the required evaluation frequency; for instance, the UK Corporate Governance Code mandates an annual evaluation.

The conduct of Board assessments can take two primary approaches. It can be handled internally by an independent party, such as the Company Secretary, or, as preferred by many regulators, entrusted to an external provider like Virteffic, with support from the Company Secretary. Engaging an independent reviewer injects objectivity and fresh insights into the evaluation process, facilitating the identification of any pertinent issues that require attention.

Typically, Board assessments are scheduled to be completed on an annual basis, forming an integral part of the company’s yearly obligations.

How Virteffic can help your Board 
Virteffic can assist your Board in its pursuit of continuous improvement. Our services are characterised by flexibility and tailored solutions, including options like one-on-one interviews and comprehensive questionnaires. For clients with whom we have established a longer relationship, we also offer the alternative of observational reviews.