London, 29 May 2019 – ICSA: The Governance Institute has today opened a consultation into the effectiveness of independent board evaluation in the UK listed sector. The review, which is being carried out at the request of the Department of Business, Energy and Industrial Strategy, will assess the quality of evaluations and identify ways in which board evaluation might be improved.
Simon Osborne, chief executive of ICSA says: “Board evaluation, when done properly, can help companies to identify skills gaps or behaviours which might have a negative impact on the effectiveness of that board. Not all companies are currently embracing good practice in seeking to deal with issues identified in evaluations, however. What is more, the standard of evaluations can vary considerably. The consultation seeks, therefore, to identify ways of improving the quality and effectiveness of board evaluations, including the potential development of a code of practice for external board evaluation.”
The consultation, which will run until 5 July 2019, is seeking views on whether there is a need for:
- A code of practice for the providers of board evaluation services, and formal arrangements for implementing and monitoring such a code
- Voluntary principles to be applied by listed companies when engaging external reviewers to undertake board evaluations
- Guidance for listed companies on disclosure of the conduct and outcomes of their board evaluation, in accordance with the 2018 UK Corporate Governance Code.
“Board evaluation not only provides a robust and objective view of the board’s effectiveness, it also demonstrates to shareholders and other stakeholders that the board is committed to performing to a high standard. It is essential that boards understand and are able to address any areas of weakness, which is why effective board evaluation plays such a crucial role in allowing boards to improve their own performance and that of the company,” concludes ICSA Policy and Research Director Peter Swabey, who chaired the steering group which helped ICSA draft the consultation.
The consultation document can be viewed here. Alternatively, more information can be obtained by contacting policy@icsa.org.uk
For further information, please contact Maria Brookes, Media Relations Manager:
mbrookes@icsa.org.uk
+44 (0)20 7612 7072
+44 (0)7890 649 143
Notes to Editors:
- ICSA: The Governance Institute is the professional body for governance. We have members in all sectors and are required by our Royal Charter to lead ‘effective governance and efficient administration of commerce, industry and public affairs’. With over 125 years’ experience, we work with regulators and policy makers to champion high standards of governance and provide qualifications, training and guidance.
Website: www.icsa.org.uk - In its feedback statement on its ‘Insolvency and Corporate Governance’ consultation paper, published in 2018, the Department of Business, Energy and Industrial Strategy invited ICSA: The Governance Institute “to convene a group including representatives from the investment community and companies to identify further ways of improving the quality and effectiveness of board evaluations including the development of a code of practice for external board evaluations”.
- The consultation steering group comprised the following members:
Peter Swabey (ICSA: The Governance Institute) – Chair
Roger Barker (Institute of Directors)
Claire Davies (Solicitor and Chartered Company Secretary)
Jessica Ground (Schroders)
Chris Hodge (ICSA: The Governance Institute)
Alison Kennedy (Aberdeen Standard Investments)
Ben Mathews (HSBC plc)
Andrew Ninian (Investment Association)
David Parkes (BAE Systems plc)
Will Pomroy (Hermes Investment Management)
Sacha Sadan (Legal & General Investment Management)
Tim Ward (Quoted Companies Alliance)
Victoria Whyte (GlaxoSmithKline plc)