Assessing the Effectiveness of Governance - How Effective Is the Board?
The IIA Standards require internal auditors to assess the effectiveness of their organization’s governance processes. It’s an understatement to say this is a challenge.
One place to start is with the board of directors (or equivalent). How effective are they in performing their duties?
A leading practice is for boards to perform self-assessments — of the operation of the board, each of its committees, and of individual directors. Perhaps a good place for the auditor to start is by evaluating and providing feedback to the board on the adequacy of board self-assessment processes.
An excellent source for many governance-related topics is the Canadian Institute of Chartered Accountants. In 2005, they released “20 Questions Directors Should Ask About Governance Assessments”.
I suggest reading this and considering whether this represents a valid standard against which you can assess the effectiveness of the board self-assessment process.
Here are some other resources for your consideration:
- http://www.complianceweek.com/pages/login.aspx?returl=/board-self-assessment-form/article/185855/&pagetypeid=28&articleid=185855&accesslevel=2&expireddays=0&accessAndPrice=0 (requires a subscription to Compliance Week)
- http://www.nacdonline.org/Resources/SelfAssessments.cfm?ItemNumber=2363 (membership of NACD is required)
If you have good guides for board self-assessment, please share — for mutual benefit.
Posted on Jan 24, 2011 by Norman Marks
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