The challenges associated with value creation drive all investors. Any investment professional is eager to make their mark by picking organisations that are able to deliver superior returns. Increasingly investors look into how organisations are governed and how effective the top decision-making bodies of organisations really are. In this white paper, we shed light on research findings and reveal the seven hallmarks of effective boards. The seven hallmarks are proven to create more effective boards and are set to be the next lever in the value creation process. Better Boards has created advanced board evaluation tools designed to motivate and inspire and above all, contribute to superior value creation.
Given that those at the top of an organisation are the key enablers and drivers of value creation, it is quite surprising how little effort is presently put into the systematic development of governing and managing boards/teams.
Board evaluations and reviews could provide a sound foundation to kick-start the development process. However, we found that many board evaluation on offer are illsuited. For board evaluations and development programmes to provide a return on investment and a positive impact on value creation, it is vital that they focus on the variables that are proven to have an impact on the effectiveness of the board.
When we analysed the final reports of board evaluation programmes we found that all too often they rely on variables that proved to be relevant in different contexts but no evidence exists that they are relevant in boardrooms, make boards more effective and contribute to the value creation process. More than that, some board evaluation programmes integrate psychometric tests that were developed for different contexts and yet are integrated into the design of board evaluation programmes. These efforts might produce “interesting results” that can be discussed and look impressive but will have little impact when the aim is to create more effective boards.