Issue link: https://digital.shearman.com/i/1512772
Shearman & Sterling LLP 25 | Evolving Notions of Board Effectiveness WHAT SHOULD BOARDS BE DOING NOW? Boards should recognize that like many other governance issues, board effectiveness has to be considered in light of changing circumstances. • Annual board self-evaluation processes should be thoughtful exercises that do not fall into the trap of repeating timeworn questions, instead providing a forum for feedback on the board's most pressing challenges, and boards should consider including interviews with individual board members on a periodic basis as a meaningful supplement to written questionnaires. Considering a third-party to lead these interviews can also enhance outcomes of the evaluation process. • Board chairs, independent lead directors and nominating and governance committee chairs need to be vigilant about the challenges the board is currently facing and try to anticipate what is coming. Executive sessions should serve as forums for discussion of these challenges, how the board's processes and responses are measuring up and the ways the board can be better and more ready to meet them. • Boards should develop a culture of considering refreshment as part of healthy governance hygiene and not necessarily tied to retirement schedules or mandatory term limits. • Increasing board diversity should go hand in hand with maintaining an inclusive, respectful and cohesive culture consistent with company values.