By Michael Oclaray , Jerome Rambaldi and Marie Holmstrom | July 4, 2025
Modern boards of directors are expanding their remit beyond business performance while incorporating corporate stewardship into overarching decision making. While stewardship includes performance, it also expands to organizational purpose and protection, a focus on people and awareness of the organization’s environmental impact on the planet.
How can a board effectively transition from a traditional, business results-oriented role to something greater? Where do you begin? These are the questions board members and senior management leaders at a U.S.-based mutual insurance company were asking.
The short answer to these questions: an investigation into the board’s current state and potential opportunities via an in-depth board effectiveness assessment.
Governance codes and stock exchange requirements around the world call for boards of directors to conduct self-evaluations. Typically, these evaluations are performed via questionnaires. However, this self-assessment process can yield limited insights, and lack of a third-party facilitator and/or input from management can hinder objectivity and balanced perspectives. Because the traditional self-assessment process can be insufficient, a more holistic approach can dig further into the board’s effectiveness in serving as an enterprise’s governing steward.
When we first talked with our client about conducting a board effectiveness assessment, we started by explaining our process, which includes seven key steps (Figure 1).
These seven steps increase board involvement and impact among boards of directors.
Seven steps to assess board effectiveness, with each subsequent step increasing the involvement and impact of the board of directors. The steps are 1) board assessment questionnaire; 2) board of director interviews; 3) board processes review; 4) diversity and board composition review; 5) individual stewardship styles; 6) board dynamics assessment; and 7) action planning workshop.
At the outset, our client was largely pleased with its board’s performance. The board chair and CEO both believed the board was functioning effectively, adding value and fulfilling its stewardship responsibilities.
However, the chair and CEO also believed that obtaining an objective, third-party perspective was critical to ensuring they were rooting out any gaps and opportunities. Their goals for the assessment were focused on:
We began with a survey of board members and key members of senior management and followed up with detailed interviews — all of which were anonymous and confidential. We then performed a comprehensive analysis of the board’s processes to assess:
In the assessment findings, we highlighted differences between board and management perspectives. For each aspect, we discussed recommendations. We then presented both the findings and recommendations, facilitating an action-planning session with board members.
Ultimately, the assessment revealed many positive outcomes for the overall board:
Regarding board operations, the assessment also confirmed that meetings are effectively run, with agendas concentrating on critical issues, and time is appropriately allocated in line with topic importance — with suitable balance between discussion and approval items.
On the surface, the board is well-run and committed to its role as steward. However, the assessment did reveal areas that could be improved — which wouldn’t necessarily be obvious without a thorough assessment.
Along with participants expressing the need for an extra step in information-sharing between board meetings, board members and senior management both indicated a need for more focus and discussion time on key areas during board meetings:
In the end, the assessment reinforced what the chair and CEO believed at the outset of the assessment: The board was functioning effectively. However, the review also provided valuable insights that otherwise may have been easily overlooked: A refined board focus and improved information exchange to further support long-term resilience, visibility and growth.
Additionally, the company concluded that board effectiveness assessments are an important step toward strengthening its board’s quality of governance. By choosing an expert partner that was able to guide them through the assessment process, the organization was able to reach beyond the status quo to proactively explore its board’s composition, function and communication — all in support of effective stewardship.
