By Michael Oclaray , Jerome Rambaldi and Marie Holmstrom | June 26, 2025
Beyond ensuring effective organization performance, boards of directors are relied upon to serve as effective long-term stewards for their organizations while being responsive to a variety of stakeholders. In turn, stewardship has evolved into an overarching principle that incorporates five key dimensions — each of which is essential for long-term resilience, visibility and growth (Figure 1).
This model serves as a comprehensive framework guiding responsible decision making and value creation in corporate stewardship. There are five key dimensions: Performance, Protection, People, Purpose and Planet.
For a long time, boards have performed self-evaluations to support their performance and as a matter of good corporate governance. In fact, governance codes and stock exchange requirements around the world call for boards to perform self-evaluations. However, self-evaluations can be a suboptimal approach.
Usually conducted annually via questionnaire, they can yield limited insights, with input weighted toward positive-only feedback. Moreover, the very nature of self-assessments is to highlight solely the directors’ input, and lack of a third-party facilitator and/or input from management can hinder objectivity and balanced perspectives.
In recent discussions with WTW, board members have expressed urgency for board effectiveness in response to increasing complexity, stakeholder pressure and technological change. 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.
To further support the board’s stewardship — and to dive deeper than the annual evaluation process — a board effectiveness assessment is performed to:
We suggest that boards incorporate an approach that includes seven key steps, each of which can vary in complexity and be tailored to the unique needs of both organizations and their boards (Figure 2).
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.
Beginning with a tool-based questionnaire completed by both board members and senior management, the process explores different topics and culminates in an action planning workshop. In this meeting, the board hears key findings on strengths and opportunities, recommendations for moving forward, and an action plan for enhancements. Having an external advisor facilitate the full process fosters open dialogue while enhancing confidentiality.
Board effectiveness assessments are an important step toward strengthening the board’s quality of governance. The goal is to reach beyond the status quo to proactively explore the board’s composition, function and communication. There are several sound reasons to conduct this type of assessment.
Effectiveness assessments provide a launch point for rethinking practices and raising standards. An assessment also helps ensure the board is living up to its purposes of:
Whether a publicly traded company, privately held organization or a not-for-profit entity — and regardless of organization size — the learning and opportunity outcomes of a board effectiveness assessment can inspire positive change for every type of board.
From breadth and depth of skills and experiences to suitability with the organization’s strategy, operations, culture and geographic coverage, board effectiveness assessments enable the board to determine whether it has the right mix of profiles to meet current and future challenges. An assessment also can lead to action toward leadership succession management, beginning with the board and continuing with the CEO and other C-suite leaders.
The proper functioning of an organization requires constructive interactions among board members as well as between the board and management. An effectiveness assessment can pressure-test communication and uncover unproductive sources of friction. It also can identify differences in decision-making methods before they become a source of conflict. Finally, an assessment can test the board’s ability to respond and navigate through crises.
Five years ago, boards of directors helped their management teams and organizations navigate through a global pandemic that had far-reaching implications on strategy, operations, risk mitigation, people and culture, sustainability and stakeholder primacy. Among our clients, we have watched boards become even stronger and more effective from that unexpected challenge.
Today, the world has entered yet another period of economic and social uncertainty and geopolitical instability with parallel challenges (e.g., climate change, influence of AI on how work is done, cybersecurity risks) that apply new pressures to purpose, people, planet, protection and performance.
Now is the time to step beyond the annual self-evaluation and perform a holistic board effectiveness assessment to prepare your board for the next phase of challenges and opportunities.
This article was first published in Directors & Boards on May 27, 2025
