Consistent with trends documented in its annual iconic Board Index, Spencer Stuart’s recent pulse survey of US public company directors reveals that individual director assessments are moving into the mainstream.
Among the key takeaways:
Prevalence—Of 326 respondents, approximately 62% (201 directors) indicated that their boards conduct individual assessments (typically annually), with the majority of those (54%) using both peer feedback and self-evaluation tools to facilitate the assessment.
Benefits—A majority of respondents who indicated that their boards conduct individual assessments identified improved overall board effectiveness and director growth and performance as among the many cited benefits of doing so: (n=201)
Independent evaluators—Nearly 30% of directors indicated that their board had used a third party to conduct individual assessments in the past three years and would do so periodically; 4% indicated they had done so, but did not plan to do so in the future; and 27% indicated their board had not used a third party, but may do so in the future. A majority of respondents whose boards had done so in the past three years touted a third party’s ability to foster candid and productive sessions, and nearly half cited a third party’s ability to optimize the effectiveness and value of individual assessments, as among the top reasons to use an outside facilitator.
Thank you to Spencer Stuart for the additional detail on particular data points.
According to Spencer Stuart’s Board Index reports, the use of individual director assessments among the S&P 500 increased from 38% in 2018 to 47% in 2023.