Byline: Iain McCormick
Director evaluation can take many forms -- from a simple board table discussion to web-based questionnaires based on well-developed governance frameworks and a fully facilitated session run by a trusted advisor.
Giving feedback to fellow directors isn't always easy, but receiving feedback from other directors can be very difficult. I recall conducting a board evaluation for a professional service firm where this was a major issue. We had used a web-based questionnaire to gather opinions on both the overall performance of the board and the individual performance of each director. Evaluation reports had been produced and distributed to all directors. I arrived at a meeting to review the findings with the board and to write a board development plan -- that, at least, was the intent.
The directors entered the room and took their seats at the board table. Most of the directors clustered around one end of the large table where the chairman and I were sitting. The exception was an immaculately dressed director who sat at the other end of the table. He looked grey and stern.
The chairman opened the meeting saying that he had asked me to join the meeting to discuss the evaluation and to assist the board with a development plan. The moment the chairman stopped speaking the remotely seated director said in a very loud firm voice: "If this is what you think of me, I resign from the board," throwing his evaluation report on the table.
The grandiose gesture came as a shock to both the chairman and me. I had a sinking feeling that a great project was about to slip away! The chairman, however, had the presence of mind to gently explore the issue with the disgruntled director and to reassure him that he had indeed made a valuable contribution over the year. I spent some time talking about the overall board results and I facilitated a discussion on areas for board development.
After the meeting the chairman and I talked about the situation. The chair then spent time with the disgruntled director to settle the situation.
Almost everyone has, I'm sure, had some difficult experience with negative feedback. No one welcomes criticism but, it is essential for building an effective board culture and for ensuring decisions are subject to robust debate. Criticism is important because humans seemingly learn more from their mistakes than their successes. When we succeed we usually just feel good and move on. When we err, we are more likely to initially feel smarted but then look carefully at the situation and learn from it. Negative feedback may not make us feel good but it is essential for our development as directors.
We may be trained in a wide range of financial analysis or strategic planning areas, but we are seldom trained in giving or receiving criticism. Many of us are blind to how we affect others when giving criticism.
Psychological research suggests that the separate neurological circuits in our brains handle negative and positive information differently. Our negative receptors are more sensitive than the circuits that handle positive feedback. Our innate 'negativity bias' apparently sees flaws as more important than positive attributes when forming initial impressions.
And responses to loss are, apparently, more powerful and potent than responses to gains in many areas including financial risk-taking behaviour. …