Know yourself. Some weeks ago I discussed how a good assessment system is essential in every company. Staff is usually assessed. This is more difficult when the management is concerned. Most managers and supervisors are not very accustomed to dealing with criticism. Many do not like criticism. “Criticism has to be constructive”, they say in that case. What they actually mean is: “You cannot make any negative comments about me!” How can you start this process of assessment of the management in such a way that it is also effective?

Self-evaluation

Let me describe a possible way. It is based on self-evaluation. It is often easier for a manager to look in the mirror every now and then and to describe what he sees, than that someone else says it. However, everyone also knows that you have to learn how to look at yourself effectively. It does not come naturally, but there are tools for this purpose.

Let us start with a supervisory board. When is an individual supervisory director useful and when is he not? I think that the use of a supervisory director is best judged by the added value he has for the company. So that is a question of self-criticism that each individual supervisory director can ask himself. Take a piece of paper and a pen and write: “my added value for the company is that I…”, and then you mention three or five points.

When you do so, you are highly tempted to write down the politically correct generalities, such as “supervising the management board” and “giving advice”. However, this is not sufficient. You have to write down as well what concretely shows the added value of you as a person and also why the other supervisory directors and the management board and the shareholder will agree, according to you.

If you cannot do this, you will soon discover your own fallacies. You are then confronted with your own illusions. For instance, if you write down that you advise the management board and you cannot give at least two examples hereof, including the appreciation that the other supervisory directors and/or the management board have shown for it, you are probably a less effective adviser than you think. If you write down that you monitor the management board effectively and that you as supervisory director ensure that nothing strange will happen, you must also be able to give some good examples hereof. If you cannot do that, you are probably just a nuisance. Or it turns out that you do not guard the company’s interest but your own interest. Or the interest of a certain group or party and not the (exclusive) interest of the company.

The nice thing about this self-evaluation is that it is meant to identify behavior in yourself that has appeared to be effective for the company. You can also start with this method on your own. Nobody has to see or read it. Just try it if you have some spare time at night or during the weekend! If the result is poor, in any event you will know yourself that there is work to be done.

From individual to organization

A next step can be to discuss the results of this effort collectively in the supervisory board or management board. On that occasion you can review your own perception of your responsibilities and fulfillment of your duties with the other supervisory directors. This will initiate many very interesting discussions. They will not only concern individual performance, but also and mainly the question what everyone actually expects from each other and what not. The discussion then shifts from the performance of individual supervisory directors to the performance of the supervisory board as a whole. The focal question is then: is our supervision effective and what demonstrates that? If not, what can we actually do to improve the quality and effectiveness of our supervision? In that case, assessment is not a meaningless, mechanical and annoying effort, but it makes an essential contribution to the development of the company and of yourself in your role. And that is the essence: know yourself!

Do you have a question about corporate governance yourself? Please e-mail it to governance@ekvandoorne.com and perhaps your question will be discussed in the next column!

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