It is important to distinguish between monitoring and the process of evaluation.
Monitoring involves observing, recording and reporting information. It is retrospective. Monitoring is a core governance function. Part of a board’s duty of care is to ensure ‘everything is as it ought to be’. Excessive monitoring, however, can distract a board from its forward looking, value-adding role. Ideally, only a small portion of any board meeting time should be devoted to monitoring. When performance criteria are determined in advance, monitoring becomes very straightforward. The chief executive simply reports against such pre-determined criteria and directors are quickly and easily able to assess satisfaction with performance.
Board meetings should primarily be used to create the future, not rehash or review the past.
Evaluation is making a judgement, mainly to improve future performance. This is best discussed at the board meeting. Evaluation consists of comparing actual versus planned results and determining if changes are required, or if there are performance or resource issues to be discussed with the chief executive.