Public focus on the importance of corporate governance has never been so intense. A series of high-profile corporate failures, several high profile reviews (Kingman, Brydon, CMA and BEIS) and the FRC’s on-going attempt to enhance the UK Corporate Governance Code have put board performance firmly on the political and corporate agenda.

However, despite this increased scrutiny, a new report by Board Benchmarking has found that board effectiveness – a pre-requisite for effective corporate governance – remains inadequate.

Published today, ‘Benchmarking Board Performance: 500 board reviews later’ is an exhaustive analysis of data from over 500 board reviews of listed, private, not-for-profit and government organisations. Released to mark the 500th review completed by Board Benchmarking, the assessment compares 500 past and present board reviews to track performance trends over time.

Its analysis reveals that around 25% of boards are currently dysfunctional. In many of those cases, the boards concerned have failed to acknowledge – or are in denial about – their dysfunctionality.

Other key findings from Board Benchmarking’s ‘Benchmarking Board Performance: 500 board reviews later’ report include:

Around 25% of the 500 assessed boards were considered dysfunctional.
It is not possible to have an effective board with an ineffective Chair.
Boards still do not spend sufficient time on questions of organisational culture and integrity.
Boards have got slightly worse at carving out time to deep dive into the most important matters.
Not-for-profit boards do not measurably outperform for-profit boards in any of Board Benchmarking’s 20 areas of focus.
Halex Consulting, official strategic alliance partner for Board Benchmarking in the UK and EU, contributed to the development of the report. Chris Burt, Halex Consulting Principal, commented that, “We’ve been impressed by how accurately Board Benchmarking’s board surveys are in predicting – and providing useful corroborating evidence for – the effectiveness of the UK boards we have independently assessed in the last 12 to 18 months.

“The report’s key findings, while slightly disheartening, do not surprise us and are broadly consistent with our own experience of performing independent board performance reviews.”