Dec 14, 2020
Performance evaluation is a critical aspect of executive talent management. Independent board directors and chairpersons have a fiduciary responsibility unto shareholders; their role also includes providing strategic direction and formulating policy. Chief executive officers (CEOs) are accountable for the organization’s overall financial performance and strategy execution.
In terms of evaluating performance, measuring financial results is generally straightforward. But measuring how and why those results were attained requires a different process.
All organizations want effective leaders whose values align with those of the organization. Leaders should act with integrity, be ethical, and hold themselves and others accountable to the highest standards of excellence. High-functioning boards and CEOs can enhance and sustain an organization’s competitive advantage in uncertain times.
Question: How do organizations measure “intangible” behaviors and attributes when people have different personalities and no two roles are the same?
Answer: Market best practice is to hire an external expert to conduct an independent performance assessment of the organization’s board and CEO. Such assessments are generally performed on an annual basis.
Newport’s Compensation Consulting Practice works with clients to develop robust performance evaluation criteria and leadership competencies that are unique to the organization and industry.
We then develop and administer a confidential survey questionnaire to stakeholders in the performance evaluation process. We further bolster the survey data with insights collected from confidential interviews. Clients use the performance evaluation results to inform executive talent management processes such as recognizing superior performance, determining annual pay increases, and identifying developmental opportunities. Results can also be used to develop executive succession plans. Newport assists our clients with this critical (but often overlooked) leadership imperative.
If you believe any of your clients might benefit from an external performance assessment of their Independent Board Directors, Chairperson, or CEO, contact Newport’s Rena Somersan at (414) 312-8189 or Dennis Koletsos at (312) 488-6767.
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