Board performance review

Table: Assessment criteria for board performance review
Board composition and skills	Whether the board has an appropriate mix of skills, expertise, experience, backgrounds and diversity to deliver the issuer’s strategic objectives and meet the challenges of today’s fast-moving world and emerging areas of concern (e.g. geo-political tensions; changing regulations; evolving artificial intelligence technology) Board refreshment / succession plans Whether the board has anticipated any planned changes to the issuer’s business objectives and assessed whether it needs to acquire further skills or qualifications
Board culture and dynamics	Whether the board’s values and behaviours align with the company’s goals and objectives, and are conducive to effective governance and decision-making How well do the directors communicate and work together Quality of key working relationships (e.g. board chair / chief executive officer, board / management) Quality of strategic discussions and decision-making on the board
Board practices	Whether the current board practices (e.g. agenda setting, governance practices, board committee structured) are fit for purpose and whether any improvements are required for the effective functioning of the board
Quality and timeliness of information to the board	Quality and timeliness of the information provided to the board (e.g. by the management) on the company and its performance Whether board papers and necessary materials are delivered in a timely manner to facilitate adequate preparation before meetings
Board meetings	Whether board meetings are effectively conducted so as to fulfil their intended purposes
Compliance and training	Whether the board adheres to applicable legal and regulatory requirements Whether directors’ developmental and training needs are adequately supported
Risk management and internal controls	Whether the board allocates sufficient time and attention to discuss and manage risk Whether the board has adequate processes in place for identifying and reviewing risks, and for overseeing the issuer’s risk management and internal controls systems
Stakeholder engagement	How the board communicates with, listens and responds to shareholders and other key stakeholders How stakeholder feedback is reflected in the board’s discussions or decision-making

Table: Assessment criteria for board performance review

Criteria

Aspects to be reviewed

Board composition and skills

Whether the board has an appropriate mix of skills, expertise, experience, backgrounds and diversity to deliver the issuer’s strategic objectives and meet the challenges of today’s fast-moving world and emerging areas of concern (e.g. geo-political tensions; changing regulations; evolving artificial intelligence technology)
Board refreshment / succession plans
Whether the board has anticipated any planned changes to the issuer’s business objectives and assessed whether it needs to acquire further skills or qualifications

Board culture and dynamics

Whether the board’s values and behaviours align with the company’s goals and objectives, and are conducive to effective governance and decision-making
How well do the directors communicate and work together
Quality of key working relationships (e.g. board chair / chief executive officer, board / management)
Quality of strategic discussions and decision-making on the board

Board practices

Whether the current board practices (e.g. agenda setting, governance practices, board committee structured) are fit for purpose and whether any improvements are required for the effective functioning of the board

Quality and timeliness of information to the board

Quality and timeliness of the information provided to the board (e.g. by the management) on the company and its performance
Whether board papers and necessary materials are delivered in a timely manner to facilitate adequate preparation before meetings

Board meetings

Whether board meetings are effectively conducted so as to fulfil their intended purposes

Compliance and training

Whether the board adheres to applicable legal and regulatory requirements
Whether directors’ developmental and training needs are adequately supported

Risk management and internal controls

Whether the board allocates sufficient time and attention to discuss and manage risk
Whether the board has adequate processes in place for identifying and reviewing risks, and for overseeing the issuer’s risk management and internal controls systems

Stakeholder engagement

How the board communicates with, listens and responds to shareholders and other key stakeholders
How stakeholder feedback is reflected in the board’s discussions or decision-making

Performance review process

The CG Code provides issuers with flexibility in terms of how to structure and implement regular board performance reviews that fit their individual circumstances. Issuers should consider whether the complexity of their operations or relevant changes (e.g. change of business model, business expansion) may require more frequent reviews than are required under the Code (once every two years).
The performance review process should be sufficiently robust and involve the board directly, with views and feedback also coming from stakeholders beyond the board (e.g. shareholders, senior executives, auditors and other advisers who interact with the board on a regular basis, as well as other employees). The process should be confidential to allow candid feedback to be provided.
In assessing whether the board’s performance effectively supports the issuer’s broader objectives, the performance review should identify the board’s strengths as well as weaknesses / gaps. Measures to address the gaps identified could include, for example, training initiatives to upskill existing directors and / or the identification of criteria for board refreshment.
Issuers should make use of a board skills matrix (please see the section on Board Skills Matrix) to record the board’s existing skills and qualifications and assess alignment of skills and experience with the issuer’s strategic objectives.
Performance review findings may facilitate the issuer’s nomination process (e.g. past evaluations may provide insights for subsequent recommendations on the re-election / re-nomination of directors).

Review by whom – internal or external reviewers?

Performance review scope: assessment criteria

Disclosure requirements