Breaking the board evaluation stigma

Mention that you’re undertaking a board evaluation and people may raise an eyebrow, lower their voice, or assume something must be wrong. It’s a familiar reaction in governance circles and this reveals an enduring discomfort with the idea of reviewing board performance.

For something that should be routine, evaluations still carry a hint of drama – as though they are triggered by conflict or crisis – rather than used to support healthy, well-functioning boards.

What’s striking is how little boards talk about evaluations. In the latest Director Sentiment Survey, directors reported high levels of discussion on core governance fundamentals – from managing conflicts of interest to debating innovation and strategic opportunities, and testing the long-term sustainability of their business models. By contrast, less than half (46.2%) of boards reported undertaking a structured evaluation.

Evaluation isn’t absent, but it sits well below other governance disciplines and remains far less visible in boardroom conversations. That gap is telling: even as expectations rise, many boards still treat evaluation as optional rather than essential.

That absence matters. When evaluations aren’t normalised, they become the exception – and anything exceptional can easily be misread. Even when a board is functioning well, the mere mention of an evaluation can generate speculation: Is something going on? Has there been a problem?

When you do something outside the norm, the assumption is there must be an issue, even when there isn’t.

What international norms tell us

Part of the problem is historical. In New Zealand, evaluations have often been introduced only when something has gone wrong, or when performance concerns have become hard to ignore. That reactive use creates an unhelpful narrative – that evaluation equals fault-finding and that boards only need to look at themselves when they are under pressure.

Conversely, failing to undertake an evaluation can be an even bigger red flag. Recent analysis of the five poorest-performing NZX-listed companies by Forsyth Barr identified lack of an annual self-review by boards as one of the common threads. Their research identified the lack of evaluation as a recurring governance weakness associated with delayed responses to structural change, weak internal controls and diminished strategic oversight.

But this perception is far from how effective governance operates internationally. In many jurisdictions, evaluation is not only expected but publicly reported. UK-listed companies undertake annual reviews and bring in external evaluators every three years. The UK’s Corporate Governance Code also requires listed boards to disclose the outcomes of their board, committee and individual director evaluations in their annual reports. This transparency removes stigma by signalling that evaluation is a normal governance activity, not an indicator of trouble.

Singapore, likewise, also requires listed entities to disclose director development and evaluation processes. Many major US investors link evaluation to board renewal, capability and accountability. Across these environments, evaluation signals strength, discipline and a willingness to learn – qualities stakeholders increasingly expect.

The international picture also shows a strong connection between evaluation and capability. Singapore’s listing rules, for example, require training for any director without prior listed experience, reinforcing that evaluation and development go hand in hand. Proxy advisers in the US recommend voting against boards that do not undertake regular individual director evaluations – not because something is wrong, but because without them, boards struggle to stay fit for purpose. And in the UK, annual disclosures normalise the idea that reviewing the board’s performance is as routine as reviewing the risk register.

Contrast that with the New Zealand experience. Our system relies heavily on voluntary practice and cultural norms. Many boards run regular evaluations – but many don’t – and even those that do often treat them quietly, almost privately. When a process is rarely discussed, it becomes surrounded by assumptions. And when assumptions fill the silence, stigma thrives.

Yet when you strip back that stigma, the value of evaluation is clear. A well-designed review lifts the board from the operational detail of meeting agendas and creates space for deeper reflection:

• • How well are we working together?
  • Are we focused on the right issues?
  • Do we have the skills and perspectives the future demands?
  • Are we challenging and supporting management constructively?
  • Are we prepared for emerging risks and evolving expectations?

Culture in the spotlight

Evaluations also shine a light on culture – often the most powerful determinant of board effectiveness. They clarify decision-making dynamics, expose blind spots, and bring unresolved tensions into the open in a safe, constructive way. And, importantly, they lay the groundwork for director development, succession planning and capability building.

Behind this reluctance sits a wider cultural challenge. Many boards still grapple with the reflective, curiosity-driven mindset that effective evaluation requires. Genuine self-assessment – individually and collectively – demands humility, openness to feedback and a willingness to question long-held assumptions. These are hallmarks of high-performing boards internationally, yet they remain unevenly embedded in New Zealand governance practice.

If we want to remove the stigma, we need to talk more openly about evaluations – not only when something is wrong, but when everything is going right. We should position them as part of the board’s normal rhythm – just like strategy days, risk workshops or annual planning. The more we integrate evaluation into the life of the board, the more it becomes a signal of professionalism rather than a sign of trouble.

Good governance is not about avoiding scrutiny – it’s about inviting it. Evaluations aren’t a sign that something is wrong. They’re one of the clearest indications that a board is committed to getting it right – for its organisation, its stakeholders and the future it is responsible for shaping.

To help your board maximise potential and drive improved board performance, visit the IoD’s board evaluation service.