Governance Bites #120: Board evaluations in sport, with Julie Hood

Even great teams need to assess their performance, and the same goes for a board. In this episode, I talk to Julie Hood about the crucial practice of board evaluations within sports organisations. We cover how to conduct a meaningful evaluation, whether through self-assessment or external review, even with limited resources. Learn what to look for, how to ensure honest feedback, and how to use the results to drive real change. This is a must-listen for any board aiming to improve its effectiveness and governance.
Links: 
Sport NZ Futures – Relevance to any organisation and sector - https://sportnz.org.nz/futures/
Sport NZ Governance Resources - https://sportnz.org.nz/sector-guidance/governance/
Strategy specific resources and content - https://sportnz.org.nz/resources/step-4-provide-strategic-leadership/
Online tutorial -good governance = https://sportnz.org.nz/resources/new-governance-101-online-training-now-live/
Julie Hood a nonprofit governance consultant with specific expertise in membership-based organisations, including sporting organisations working in complex federated structures.  She is currently an Independent Director at the Wellington North Badminton Association, gaining hands-on experience in voluntary governance and brings executive leadership experience from the public, private, and not-for-profit sectors. 
In 2024, Julie began a PhD focused on how sport CEOs can develop their governance capability to better support effective board (and their own) performance. A Chartered Member of the Institute of Directors and MBA graduate from Victoria University of Wellington, Julie has a consultancy practice helping boards and executives deliver the right results sustainably.
#governance, #leadership, #corporategovernance, #boardcraft, #decisionmaking, #makingadifference, #ceo, #governancebites, #boardroom, #director

Transcript

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Kia ora tātou [greetings everyone]. Ko Julie Hood toku ingoa [my name is Julie Hood]. Julie Hood. I'm here  to talk about board evaluations with a focus on non-profit sporting entities, but I can talk generally about it, as well, because in many instances it's kind of the same and lovely to be here to do this. Thank you very much. Hi, welcome to Governance Bites. My name is Mark Banicevich, and as you just heard, today, I have the pleasure again to spend time with Julie Hood. Julie, thank you very much for your time. You do a lot of work with sports boards. So, a great person to talk to about board evaluation, particularly focused on a sports context, but as you said in your introduction, there's a lot of overlap in general board evaluations. Why are board evaluations important, and are there any reasons that are particular to sports organisations? Well, I always think it's a little bit like if you're going to evaluate the chief executive, then you need to evaluate yourself, and a good evaluation, an evaluation done well, ideally with an independent taking a look, will give the board an idea about where their strengths are, what they're doing well, and where the gaps are. So, not 'bad' and 'wrong'.'Oh my gosh, you haven't got those. That's terrible.' Let's take a look on a regular basis about where, of all of the things that you should have in place to function really effectively, what's in place, being applied, going well? What's in place, being forgotten about, and what's not in place? And then once the evaluation is done, the board then has an ongoing programme of development that it can diary so that it doesn't have too much to do at once and over a period of time can close out the gaps. Right. Right. It's an interesting topic because I recently caught up with Katie Beith from Forsyth Barr, and they'd just released a piece of research into five New Zealand companies that have significantly underperformed in the last few years. And one of the indicators they found was a lack of self-evaluation from those boards. So yeah, really interesting. What are the key objectives a sports board should aim to achieve through this process of board evaluation? Well, it's a good question to ask themselves before they do it. 'Why are we going to do that?''What do we, is there anything we particularly want to take a look at, or do we want to do'just a general, kind of like an audit on general things?' And/or, 'Is there something'we specifically want to dive into?' And, 'What do we want to get out of it?' And, 'What are we going to do with it once we've got'the stuff that we've got?' So not everybody on a board will be comfortable being evaluated and the safest way to do it would be to do, I think you mentioned earlier, a self-evaluation, but there's real evidence to suggest that whenever we evaluate ourselves we have a kind of a rosy view of how we are going. Yes. And one of my lovely mentors, Graeme Nahkies, who said to me a long, long time ago when I was the chief executive of another organisation, Julie, self-evaluations, when a board does a self-evaluation and someone comes in externally and has a look, you can drive a truck through the difference between what the individual directors think and what an independent thinks, particularly if they're doing it by kind of triangulating documents and other data. Right. Yeah. And again, it's not a criticism of a board. It's just that we overestimate how good we are. Yeah. And we have a positive bias towards that. We're also often not comparing ourselves to anything else, right. That is your board experience. You're not looking at best practice. Correct You're not looking at anything else except your own performance. Correct. Yeah. So, how frequently should a board perform those evaluations? And you know, you've talked about an independent evaluation versus self-evaluation. You know, should there be a less periodic independent one and self-evaluations in between and, you know, what's the cadence and who? Yeah. Well, there's lots of ways that you can evaluate yourself, of course. You can do, in the sporting sector, the sporting organisations that are funded by Sport New Zealand, for example, have an opportunity, it's voluntary, not compulsory, to undertake board evaluations as often as they like. But there's also quite a comprehensive programme called the Governance Mark that they can go through and achieve and once they've achieved it they've got that standard for three years. So they would review every three years and some of them actually do a mini review at 18 months just to make sure that they are tracking well. So really you can do your own cadence but I think every three or four years is good to do a full independent one - Right. - and have a development plan in place. Many chairs do mini reviews at the end of every board meeting. Yes. 'How to' quickfire questions. How did we go? You can get management's view of the board either bundled up into a three yearly or four yearly evaluation or... I think annual is a bit much but I think there should be, every one or two years, the board members themselves should have an evaluation of their own performance and the chair - Yes. - should have an evaluation of their performance. Some say annual. I think that's a big ask. Unless there are issues but certainly every two years you should take a look at your, 'How am I doing?' Yes. 'Against my peers. And how do we think the chair is doing?' And especially if you're going to, if a board member is going to, like if your board member has got a tenure cap and they want to stay on, and there's an exception allowed to stay on, then I think that's another very good time to do an evaluation of the board member's performance before you roll anyone over, - Right. - past your tenure cap or even as they come up for re-election. So lots of opportunities, if a board is open to it, to, non-critically but critically, take a look at how they're tracking against criteria. Yes. So most board evaluations are structured up under some kind of governance framework. There are more frameworks than there are people in the world probably, and they're all very common and similar. They've got similar things that they look at. But, you know, if you haven't got a framework, find someone who's got one and do the evaluation reasonably regularly enough to assure yourselves and your funders and external stakeholders that you are competent. Right. Not completely competent with everything, but you're competent; in the areas where you're not competent, you've got a plan in place to improve that competence. Okay. Yes. And there, you know, as you've alluded to, there's many ways to do an evaluation. At the end of each board meeting, the 'what do we do well, where can we improve' kind of stuff, that very short and informal process. You've got self-reviews of individuals, you've got peer reviews of each other, you've got reviews of the board as a whole. Correct. Any of those things can be done by the internal group themselves or by an independent. Correct. You can have an independent come in and do, or facilitate evaluations of each individual board member, and the whole board. So what is a robust, if you're talking about a three-yearly independent review, what does that independent review look like? Are you, is the person evaluating each individual board member, the chair and the board as a whole or are they just looking at the board as a whole? How does that look? Well, it depends on the scope. If you're talking about the board itself, how is the board functioning? I think if I was commissioning one, I'd want to, I would want to do it independently. I'd want to know that the independent person was experienced, what their experience was. I'd want to know the criteria under which we were going to be evaluated so that it was comprehensive enough, so I could add to it if I wanted to. I'd want to have the management's view of the board and that can, if it's done well, that's not a separate report but it's integrated by the external evaluator into the findings. Yes. So you can't go,'Oh, the chief executive said that or that or that'. No, no. So that they get that view. And interviews with all of the board members and the chair and the chief executive, just to get a sense of how they think they're tracking, and to look at some key documents. The final thing that would be great if the budget stretches, if you're having to pay for this, which mostly you would, would be to have at least one if not two board observations. Right. So have someone sitting in a board meeting having evaluated everything, all the documents, the conversations, looking at the self-evaluation. So an evaluation typically is, the board members do a self-evaluation, - Yes. - and the evaluator takes a look at that, considers what the management's view is, reads the documents, thinks about the interviews and then forms a separate assessment. So out of five, I might think as a board member the board is operating at a three or a four, and the evaluator might think, actually, it's a one or a two. Yes. Or a five. So do all of that. And then before the final report is done, sit around the board table with the board for a board meeting. As a fly on the wall? As a fly on the wall. Receive the papers, have a checklist, and then just make a note of, against the checklist would be, how a good board meeting operates. Yes. And then just make the note. So, is the board operating the way it says it's operating in the self-evaluation, or is it not? And then that becomes more really valuable intel. - Yes. - for the board when the development report comes and the development plan is produced or the recommendations are produced. So, it's quite comprehensive but well worth doing. Yes. Yeah. And certainly very, very valuable. Sports organisations are quite often quite strapped for cash. How do they balance the cost of a good independent board review with their limited resources? Well, if you're tiny, it is tricky to do. There are people who will do it pro bono. I mean I do some pro bono work and most people will. If you can find some money, then even a short evaluation with an independent could be really worthwhile. So narrowing the scope down to get the cost down. Narrowing the scope down. There may be, so in sport there may be an opportunity to approach, if you're a sporting entity, to approach Sport New Zealand, because they may contribute to something like that. As may other funders contribute to board evaluations. Yes. So do that. And I guess if you can't do anything, either find a self-evaluation online you can do, or get together and craft up some questions using ChatGTP or Copilot, and run your own self-evaluation through it with your chief executive. Because the chief executive probably could provide some useful objective guidance to the board if they know about governance. Yes. But try and do something that is objective. Has Sport New Zealand got a self-evaluation framework that they can go to and download? Yeah, it's very - oh, we've got a framework. Yes. It's public facing and it has a very comprehensive evaluation programme. Comprehensive evaluation programmes from a self-assessment to a foundational evaluation of about 18 indicators and then the comprehensive Governance Mark which is 36 indicators. Okay. And that's all done online. Okay. I might ask you for some links if I can and pop them into the comments and stuff so that people can find them. I can send those. Unfortunately, if you're not a sporting entity, you can't access the evaluations. Right. But there's certainly enormous resources available for anyone in governance, free to access. Amazing. Sport New Zealand's got incredible resources. It's amazing. Yeah. Yeah. Yeah. What are some of the key aspects or areas of sport performance that a comprehensive evaluation should cover? Are you looking at how the strategy is being created and implemented? Are you looking at the risk management, the stakeholder engagement? What are these kind of areas that you cover? Yeah, if I can bring to mind the framework that Sport New Zealand's got. This will be a good test, won't it. Memory test for you. Because I don't run this programme now. My colleague Jacqui Apiata runs it. She'd be a good person to talk to. Oh, okay. There are four pillars from memory. And here we go. Let's see if I can remember. One is focused on strategy, constitutions, those kinds of documents. One's focused on inside the boardroom. So, how the board operates. There's a bunch of questions in there about how the board operates, how it structures up its meetings, how it interacts with the chief executive, the documents that come to the board, how the board is constructed, appointed, elected. Right. How the board is, how the elections run. They look at all of that kind of stuff, inside the boardroom. There's a compliance component. So, how is risk and compliance managed? Are there risk registers? Does that come to the board? Is there a policy document? Is the board operating within its constitutional trust deed? And there's one other. Now, you can help me with this. What have we not covered off? You've talked about strategy,- Policy and risk. - What happens inside the boardroom. Policy and risk management. Oh, there's quite a bit in there around the board's role in organisational culture. So, values. Right. Is the board living its values? What evidence has the board got that it's living its values? Do the values sit on the strategy? How is the engagement? What are the behaviours like between the board and the chief executive? Does the role, does the board understand its role in governance is distinct from management? So those kinds of questions. There's about 36 of them. There used to be 72. Wow. It's quite a lot. Yeah. Yeah. So it canvases all the roles of the board, and asks questions, and then looks at documents. So they look at the strategy, at the constitution, at the risk frameworks, at the stakeholder plan, if there is one, the board papers. Yeah. Terms of reference for committees. It's quite comprehensive. Yeah. Wow. That's a large piece of work. Now I'm going to have to go back and see what I've missed. I'm sure there'd be stuff about stakeholder engagement and member engagement - All of that. - and that kind of stuff, as well. Yeah, yeah. Yeah. All of that. How can the board ensure that the evaluation process is truly honest and generates meaningful feedback particularly for, you know, you'd expect that with an external that would be part and parcel, but if they're doing a self-evaluation how can they ensure that it really gets some useful feedback for them? If there's if there's an opportunity for the board maybe to have some training beforehand, if they don't know anything about governance, then it's going to be pretty tricky to go in and do a self-evaluation and form a view on how good or not the board is and where the gaps are. Yes. So, probably some refresher training in some way. There's a bunch of training available out in the big wide world that's free. Yes. That they can access. So at least have a feel for what they should expect to be asked and then give the questions some consideration before answering them. Read some documents. I'd go straight to the induction folder sitting in wherever it's sitting and read all the materials that I should have read during induction if I didn't read it. Assuming there's an induction folder. Assuming there's an induction folder and if there isn't then that can go on your long list of things to have. Absolutely. So the preparation, now I'm thinking about it, is probably useful because it in and of itself it will identify gaps and, 'Do we have a constitution?''Where is it?' 'Do we have a strategy?' 'Where is it?''Where are these board documents sitting?' So all of that, and then go in with an open mind and be prepared to be reasonable about, you know, the self-evaluation that you do. Yeah. I think afterwards, it's quite a good idea afterwards for the board to come together and just have a chat about how it went. Some boards do evaluations together. If they've got an online one they can kind of do it together. But ideally independently. Yeah. After the board evaluation is complete, how can the board ensure that it actually leads to some real change? They don't just go, 'Oh, that's great.' Shelve it, and carry on with what they've always done. Yeah. You need to come out with some kind of a development plan. I was thinking about a board member that said to me a while back. We were just in a meeting, and he was talking about how valuable these evaluations were. And I went up afterwards and said, he said,'You just learn so much.' I said, 'What is it you learn?' And he said, 'You learn what you forget, or what you've forgotten.' So whatever comes out of that evaluation, put it into a plan. And if you've never done it before and you're not very, you haven't got a lot of maturity and it feels like a lot, give yourselves two years. And prioritise. Start with the important stuff and work down. Yes. And every board meeting there is something from that development plan on the agenda that's been worked up and presented. It might be a new policy, or a new document that's presented in draft, that everyone can contribute to. So make the board meetings work. Yes. And chip away at doing that. Right. Should the results of a board evaluation be shared in any way with stakeholders? And if so, you know, what should be said, to what extent? Well, I don't have a view on that. If I was a board member, if I was a board member and it was a free and frank process where we could be really honest, and where we're at, maybe you could share some high-level results, particularly where the strengths are and where the development needs are. Right. So in an annual plan, an annual report for example to members, the board could easily say,'We've done an evaluation.' Yes. 'These are the areas that we have determined as being quite strong'or have had a view, and these are the areas that we are going to develop'over the next 12 months.' I think you could definitely do that. I don't think you need to share any detail. No, you wouldn't want to. About what was in there. So, but yes, certainly to members you could. Yeah, the high-level stuff. It would, for one thing, it would give the members an idea that there's a reason they paid for this, if there's been some cost associated. Correct. And also, yes, that awareness, showing of the awareness of the continuous development. You may also have some members that can say'Oh I can help with that. I've got some experience in that area'. So there would be some good reasons to share some high-level stuff. But as you say the details there could be some dirty laundry that you really shouldn't air. It's just not appropriate to do. I don't think it is appropriate. Yeah. You don't want to put board members off from doing it. No. But similarly you need to be transparent. And to your point, especially if you're paying but even if you're not, I think it's a very good thing to be able to say to external funders that you're a good bet. Yes. Because funding is getting scarcer to get. Absolutely. So, you need to put your best foot forward. Yes. Yeah. Are there any specific considerations or unique elements that should be factored into board evaluations for sports organisations? Is there anything unique for sports organisations? I think they would probably come through in the constitution because sitting in there will be, what would be sitting in there? I was going to say sitting in there will be, oh, integrity, can sometimes sit in there. Yes. there may be some things that they would look at relating to risk and compliance in sport, specific elements like, has there been an integrity breach? Health and safety could be another major one. Yeah, health and safety. Yeah, health and safety broadly, unless you're in maybe rugby where you're wanting to take a look at head injuries, but I don't think the evaluation goes into that in detail. It looks at the policies, and it makes an evaluation on whether the policies have got sufficient information in there to assure the board that all those sorts of things at an operational level are being taken into account. Are being considered. And the board is receiving regular reports- Yes. - on health and safety, risk and the like. So I think probably the main thing is, has any emergent risk emerged, and how is the board dealing with it? Yes. Whether it's sport or not. What role does the board evaluation play in ensuring that there is the right mix of skills around the board table? What the gaps are there? What role has board evaluation got? What role has the board evaluation? Does board evaluation have a role in that, you know, identifying gaps in the skills matrix for example, and where the board may be lacking particular areas of expertise? My experience is that the board evaluation will say,'Do you have a skills matrix?' And it might dive into what is contained in the skills matrix and make a recommendation if it's pretty basic. So it's more about evaluating the process and the frameworks that are in place, than evaluating the skills that are around the board table and saying, 'Actually you've got'a gap here that you really need some more legal experience,' for example. Yes. Because the board determines the skills that they require. Right. And they may be contracting in legal experience. They may not necessarily have to have a lawyer on the board. Yes. I mean, boards can do a deep dive into anything they like. So they could say, 'Take a look at our skills matrix, and while you're there, make some recommendations.' But that would be another conversation. Right. About, 'Let's have a look at your strategy'.'Where do you think the gaps are?' 'What's coming up?' So that's a whole separate contract of work, really, if you're going to dive into that. Scope element, yeah. So normally it would be looking for what you have in place, and if it's being applied appropriately. Right, okay. Yeah. Rather than diving too much into the detail of it. Yeah, that's interesting. Okay. In your experience, what are some of the best practices you've observed in sports organisations that are conducting board evaluations where they've led to really significant improvements? Yes. I just keep thinking of, I won't name the organisation because I haven't got a permission, but it's a fabulous story of an organisation when I first started. It's a sporting organisation when I first started that were right at the beginning of their board evaluation, of their board maturity development. They were kind of a committee and recently merged into a board. And their chair was about ready to go. So they needed a new chair. They had no policies and processes in place really, and their chief executive had just exited. So they were really reforming. And they took the opportunity to do that reforming by a comprehensive evaluation programme. They picked the only one we had at the time, which was the Governance Mark. They were all volunteers, and it was a small organisation with not a lot of money. And over six years they transformed themselves into a high performing organisation to the point where, when they went out for a chief executive, one of the board members came to me at a conference and said, 'I've got the most exciting thing to tell you. We've gone out for,'we've gone out to replace some board members and our chief executive has sent through two people that they'recommended and they said to them,"you need to get onto this board because'"this board is amazing"'. Wow. So at the time it was 72 elements and I think they had in place something like 13. And they appointed one board member, not the chair, to drive the programme of development. Yes. And by the time they had completed their development over two years, I think their mark was something like 69 out of 72. And those elements that they didn't get weren't mandatory elements anyway. They had transformed themselves. Did that require any change to the constitution? Yes. Yes. Right. Massive. Yeah. The constitution. I think it was a trust deed, actually. They updated their trust deed. They created an outcome-based statement of strategic direction. They aligned all of the strategy up with KPIs [key performance indicators] for the chief executive. They restructured how the board meetings were structured up. So strategy at the top. They created KPIs for the chief executive. Basic [KPIs]. They did redid their budget. They redid their risk and stakeholder scenarios based on - Wow. - It was, honestly, it was a massive piece of work. And I always think about them. Kind of 13 out of 72, to 69 out of 72. Yes. Wholly voluntary board. Amazing. Wow. A complete transformation. And the gains that they're getting from, I don't know, because I haven't looked, about whether they have generated additional, whether they've been able to diversify their revenue streams as a result, but I wouldn't be surprised if they were able to, because they are really highly functioning, and got solid systems in place. So it is absolutely possible and they were a small entity. Wow. You don't have to be big to have a commitment to doing a job well. No. Wow, that's fantastic. I know, it was a great, it's a great story. Yeah, a great story. I guess a related, a final question for you. If you had a director come to you and say,'I'm on a board and it's not going well. The board's not functioning.'We're not getting there.' What advice would you give? What's going wrong? Well, I guess yeah, I'm making this up. So, you know, maybe it's just a board that's not doing the right job. It's not really understanding its role in governance. It's getting too operational. The wrong things are on the board agenda. Those sorts of issues. I'd probably, I'd get a feel for whether they were up for making a difference, making any change. Yes. Because there'll be many boards in varying degrees of dysfunction, including large corporate entities. Yes. Not just sporting entities and large non-profit entities can go through phases of maturity if they're not careful. Particularly if there's been turnover. But I think the most important thing I'd want to know is, whatever's happening, it can happen to any board at any time, are they up for changing that? And then if they are, work out the scope that is required by having some conversations with them about what is actually going wrong, and getting enough information to be able to do some kind of diagnosis for them and then helping them reset in whatever way that that might work best for them. Yeah. And if there's resistance to change, I wouldn't go anywhere near them. Right. Leave the board. Just, get out. Oh, yes. I would if it's the board member. Yeah. Yeah. I mean, that's the ultimate. Yeah. That's the ultimate decision that board members can make, is to go if it's going to impact their own reputation or well-being. Yes. Get out. Yeah, great. Julie, thank you very much again for your time. A pleasure. We had a really interesting conversation. Great questions. Thank you. I'm going to have to go back and make sure I've answered them correctly. Well, let me know if there's any problems and I won't publish the episode. I will! Yeah, I will. Oh, don't put that in there. That was a big lie. So, you know that if you're watching this, then it's been, it's passed the test. Yes! So, I'll look forward to catching up again soon and to seeing you next episode. Thanks very much. Thank you. Thank you for watching this episode of Governance Bites. We have more episodes on YouTube and your favourite podcast channel where I interview directors and experts on various topics relating to boards of directors and governance. We'd love to see you back, and please like, subscribe, and share the videos and podcasts.