Board Evaluations : Insights from India and Beyond

Board evaluation has emerged as a corporate governance priority and brought to the forefront many associated challenges. This is not a revolutionary change. Board assessment procedures are evolving as nations and companies formulate and test divers...

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Main Authors:	Larson, Mary Jo, Pierce, Chris
Format:	Working Paper
Language:	English en_US
Published:	International Finance Corporation, Washington, DC 2015
Subjects:	Corporate governance accountability Conduct guidelines
Online Access:	http://documents.worldbank.org/curated/en/2015/06/24606693/board-evaluations-insights-india-beyond http://hdl.handle.net/10986/22146

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recordtype	oai_dc
spelling	okr-10986-221462021-04-23T14:04:06Z Board Evaluations : Insights from India and Beyond Larson, Mary Jo Pierce, Chris Corporate governance accountability Conduct guidelines Board evaluation has emerged as a corporate governance priority and brought to the forefront many associated challenges. This is not a revolutionary change. Board assessment procedures are evolving as nations and companies formulate and test diverse requirements. Until recently effective Board evaluation was not regarded a Board priority. In 2002, Yale University Professor Jeffrey Sonnenfeld commented: ‘I can’t think of a single work group whose performance gets assessed less rigorously than corporate Boards.’ India has moved to the forefront of this governance challenge with its new Companies Act of 2013, which states that the Board of every listed company and other public companies with paid-up capital of Rs 25 crore or more (approximately US$ 4 million) shall report the annual performance evaluation of individual directors, the Board and its committees. However, in the last 12 years the situation has substantially changed. Corporate governance practitioners have been applying Peter Drucker’s idea that ‘what gets measured gets managed,’ and among senior leaders, what gets acknowledged and valued gets done even better. Recognizing the merits of various approaches, we highlight the Board’s leadership culture, the tone at the top, as an essential feature of an effective assessment process. Board evaluation is driven by the values and performance expectations of senior leaders in Tata Group, Infosys and other well-known Indian companies. Topics addressed in this article include: incentives for Board evaluation; extent of Board evaluation globally; significant requirements in India; predictable barriers and challenges; case example of Board leadership from India; recommended practices worldwide; and future trends and challenges. 2015-07-13T16:15:43Z 2015-07-13T16:15:43Z 2015-01-01 Working Paper http://documents.worldbank.org/curated/en/2015/06/24606693/board-evaluations-insights-india-beyond http://hdl.handle.net/10986/22146 English en_US CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo/ International Finance Corporation International Finance Corporation, Washington, DC Publications & Research Publications & Research :: Working Paper South Asia India
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	Corporate governance accountability Conduct guidelines
spellingShingle	Corporate governance accountability Conduct guidelines Larson, Mary Jo Pierce, Chris Board Evaluations : Insights from India and Beyond
geographic_facet	South Asia India
description	Board evaluation has emerged as a corporate governance priority and brought to the forefront many associated challenges. This is not a revolutionary change. Board assessment procedures are evolving as nations and companies formulate and test diverse requirements. Until recently effective Board evaluation was not regarded a Board priority. In 2002, Yale University Professor Jeffrey Sonnenfeld commented: ‘I can’t think of a single work group whose performance gets assessed less rigorously than corporate Boards.’ India has moved to the forefront of this governance challenge with its new Companies Act of 2013, which states that the Board of every listed company and other public companies with paid-up capital of Rs 25 crore or more (approximately US$ 4 million) shall report the annual performance evaluation of individual directors, the Board and its committees. However, in the last 12 years the situation has substantially changed. Corporate governance practitioners have been applying Peter Drucker’s idea that ‘what gets measured gets managed,’ and among senior leaders, what gets acknowledged and valued gets done even better. Recognizing the merits of various approaches, we highlight the Board’s leadership culture, the tone at the top, as an essential feature of an effective assessment process. Board evaluation is driven by the values and performance expectations of senior leaders in Tata Group, Infosys and other well-known Indian companies. Topics addressed in this article include: incentives for Board evaluation; extent of Board evaluation globally; significant requirements in India; predictable barriers and challenges; case example of Board leadership from India; recommended practices worldwide; and future trends and challenges.
format	Working Paper
author	Larson, Mary Jo Pierce, Chris
author_facet	Larson, Mary Jo Pierce, Chris
author_sort	Larson, Mary Jo
title	Board Evaluations : Insights from India and Beyond
title_short	Board Evaluations : Insights from India and Beyond
title_full	Board Evaluations : Insights from India and Beyond
title_fullStr	Board Evaluations : Insights from India and Beyond
title_full_unstemmed	Board Evaluations : Insights from India and Beyond
title_sort	board evaluations : insights from india and beyond
publisher	International Finance Corporation, Washington, DC
publishDate	2015
url	http://documents.worldbank.org/curated/en/2015/06/24606693/board-evaluations-insights-india-beyond http://hdl.handle.net/10986/22146
_version_	1764450081026605056

Board Evaluations : Insights from India and Beyond

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