Prerequisites for building quality boards of directors – 6

When I was first appointed as a member of a bank board, the MD arranged for us to attend training covering key operations, corporate governance and the reports submitted to the board. These sessions were invaluable as they helped me gain a deeper understanding of banking and governance practices.

To this day, I remain grateful to the MD for organising the training as it significantly shaped my ability to contribute effectively.

However, training alone is not enough. To ensure it truly adds value to the organisation, each session should be followed by practical assessment.

Trainers should participate in at least two rounds of committee and board meetings after training to apply the knowledge gained and evaluating its relevance in real situations.

My experience shows that without this follow-up, some members may disregard the training entirely, even when it promotes good governance.

In several instances, I observed some board members openly refusing to implement what they had learnt simply because they did not want to, highlighting the need for structured post-training assessment.

Once training and development initiatives are in place, the next critical step is to ensure that these efforts translate into measurable improvements in board performance. This brings us to the issue of board assessment, a process that, if done properly, strengthens accountability and continuous learning within the board.

In the banking industry, for example, assessments are often conducted primarily to meet regulatory requirements outlined by the central bank.

Typically, the board appoints the assessor and in many cases, the process is coordinated by the company secretary and the CEO or MD, who are themselves subjected to assessment. While this approach produces some results, it raises a key concern: how can those being assessed supervise the process themselves?

I argue that assessments should be initiated by the appointing authority and supervised by an independent entity. Some may suggest that board performance can be judged solely by the achievement of shareholder-mandated targets, but I contend that this is insufficient.

A robust assessment should examine how the board performs its oversight and strategic functions, ensuring that it operates productively, responsibly and accountably.

For private companies, external auditors can supervise the exercise, while in state-owned enterprises, the Controller and Auditor General and Treasury Registrar should be involved. These institutions can also collaborate with professional organisations to appoint qualified assessors with industry knowledge, governance expertise and integrity.

The individuals chosen to assess board performance will possess similar qualities to those of individuals involved in the recruitment of board members, which are solid knowledge of the industry, good understanding of corporate governance and unquestionable integrity.

They should also be independent and credible, trusted equally by both the appointing authority and the board.

Before beginning their work, assessors should undergo a short orientation to understand the organisation’s structure, major activities and governance framework. This ensures their evaluation is grounded in the institution’s real context.

The assessment itself should be done in stages and combine several methods.

It usually begins with a structured questionnaire in which board members evaluate themselves and one another, including the chairperson, CEO or MD and company secretary. Such self-assessments are useful for reflection and awareness, but they should not stand alone.

To gain a more objective and well-rounded view, I advise assessors to also review key organisational documents such as board and committee charters, strategic and annual plans, policies and minutes of meetings. These materials reveal how effectively the board is guiding the organisation’s strategic direction and fulfilling its oversight role.

In addition, assessors should have access to information about all training and official travel funded by the organisation for each director. This helps determine whether such activities are genuinely relevant to the board’s core functions or simply a misuse of resources.

In some cases, management may use training and travel in exchange for favours from the board, or the board itself may pressure management into approving unnecessary trips and training.

By examining these areas closely, assessors can identify such practices and provide recommendations that reinforce accountability, professionalism and the responsible use of institutional resources.

In the next week’s seventh part of this series, I will present more insights into assessment procedures to be observed while conducting board assessment. I will emphasise on the importance of looking at training, meetings and travel while conducting assessment.

Dr Muhsin Salim Masoud is a seasoned banker and academic, who has also served as managing director of the People’s Bank of Zanzibar and Amana Bank. [email protected]