Board Evaluations Are Broken — And the Governance Industry Knows It

The gap between governance assessment and governance knowledge is wider than most boards realize

In 2025, Spencer Stuart found that only 43% of CEOs believed their board directors had the subject-matter expertise their organizations actually needed. Among directors themselves, 63% believed they did. That 20-point gap is not a communication problem. It is a measurement problem — and it sits at the heart of how governance boards currently evaluate themselves.

The premise behind board self-evaluation is sound enough. Boards that reflect on their own performance are more likely to identify weaknesses, strengthen composition, and hold themselves accountable. Few serious governance practitioners dispute this premise.

What is increasingly disputed — at least among those willing to look closely at the evidence — is whether the dominant methods of board evaluation actually accomplish what they claim to. A growing body of research and practitioner commentary suggests they do not.

The standard approach measures confidence. It does not measure competence. And that distinction matters enormously.

What the Governance Industry Currently Recommends

The current state of the art in board evaluation has three primary pillars, each with genuine merit and each with significant blind spots.

1. The Self-Assessment Survey

The most widely used tool remains the structured self-assessment questionnaire. BoardSource — the leading authority on nonprofit governance in the United States — anchors its Board Self-Assessment (BSA) tool in this methodology. Directors rate the board's performance across key governance responsibilities, typically using a Likert scale, with the option to add open-ended comments. BoardSource has administered versions of this tool for over 30 years, and their biennial Leading with Intent study remains the most comprehensive longitudinal dataset on nonprofit board practices in existence.

For corporate boards, the benchmark is similarly entrenched. Korn Ferry's Annual State of Board Evaluations in the U.S. — produced in partnership with Gibson, Dunn & Crutcher — found that 97% of S&P 500 companies disclosed details of their board evaluation process in their 2023 proxy statements. Self-assessment is part of the process at 99% of those firms.

The rationale for self-assessment is reasonable: it creates structured reflection, surfaces perceived strengths and weaknesses, establishes a common vocabulary around governance responsibilities, and generates a record of accountability. Done well, it is not nothing.

2. Structured Director Interviews

A meaningful upgrade to the pure survey model is the addition of one-on-one director interviews, typically conducted by the board chair, lead director, or an external facilitator.

Korn Ferry's research found that 51% of S&P 500 companies now incorporate director interviews into their evaluation process — up from earlier years, reflecting a growing recognition that surveys alone are insufficient.

David Larcker, Professor of Accounting at the Stanford Graduate School of Business and one of the foremost researchers in corporate governance, has been direct on this point: "Paper surveys miss all the nuances and context that could create real value from board assessments." Interviews allow for follow-up, probe vague answers, and surface dynamics that written questionnaires cannot capture. They are meaningfully better.

3. External Facilitation and Three-Tier Evaluation

The most sophisticated current practice combines an external evaluator with a three-tier structure: assessing the full board, individual committees, and individual directors separately. Korn Ferry's 2025 analysis found this approach most prevalent among Fortune's World's Most Admired Companies within the S&P 500 — boards that show greater transparency around evaluation methodology, broader use of third-party facilitators, and more detailed disclosure of evaluation topics.

Some external evaluators — notably Independent Audit's Thinking Board platform in the UK — also begin with a desk audit: a review of governance documents, committee charters, board minutes, and policy frameworks to identify gaps between what is formally documented and what actually occurs in practice. This is a more rigorous starting point than a survey alone.

The UK Corporate Governance Code has established a norm, now increasingly referenced internationally, of external board evaluation every three years — a cycle that many governance advisors are beginning to recommend for large nonprofits and foundations as well.

Where the Current Board Evaluation Model Breaks Down

Each of these advances is real. None of them solves the fundamental problem.

The Board Confidence vs Competence Gap

Return to that Spencer Stuart finding for a moment. Only 43% of CEOs believed their directors had the expertise their organizations needed — while 63% of directors believed they did. The people working most closely with the board assessed director competence 20 points lower than directors assessed themselves.

This is not a minor discrepancy. It is structural evidence of a measurement problem. When your primary instrument for assessing governance competence is director self-perception, and director self-perception diverges this significantly from independent observation, the instrument is not doing what you think it is.

Board Evaluation Ratings Measure Feelings, Not Knowledge

The deeper issue with Likert-scale self-assessment is epistemological. When a director rates the board "4 out of 5" on financial oversight, what is being measured? Not financial literacy. Not the ability to identify a material misstatement. Not knowledge of what the audit committee's mandate actually requires.

What is being measured is how confident that director feels about the board's financial oversight — which is a function of disposition, experience, and board culture as much as it is a function of actual competence.

Weil, Gotshal & Manges' Guide to Nonprofit Governance 2025 — one of the most thorough practitioner references currently available — notes that directors should seek out information from management where required to understand the organization's structure, and that boards bear responsibility for meaningful oversight of financial reporting, risk management, and conflicts of interest. It does not provide any mechanism for verifying whether directors actually possess the knowledge required to discharge these responsibilities.

The guide describes what boards should do. It cannot tell you whether they know how.

The American Accounting Association's 2024 literature review on nonprofit board governance, published in the Journal of Governmental & Nonprofit Accounting, identified the same limitation in the research base: studies typically use self-reported information about policies and procedures as a proxy for governance performance, because "assessing a board directly often involves more nuanced information" — and that nuanced information is rarely available.

The Process-Outcome Disconnect

Perhaps the most damning finding in recent governance research comes from Korn Ferry itself. Its 2025 report on board evaluations notes that while boards are increasingly investing in the tools and processes used to assess performance, they "offer limited insight into how the results actually translate into governance improvement." The firm that produces the most comprehensive annual analysis of board evaluation practices in the United States is acknowledging that better process disclosure has not produced better governance outcomes.

This is consistent with what the National Council of Nonprofits frames as the central purpose of board self-assessment: revealing how close or far away the board believes it is from the expectations it has set for itself. The key word is believes. The entire architecture of current board evaluation is built on the foundation of belief — self-reported, perception-based, rarely verified.

Individual Director Accountability Remains the Weakest Link

Even in the most sophisticated current frameworks, individual director accountability is limited. Korn Ferry's 2024 data found that only 50% of S&P 500 boards conducted individual director assessments — down from 59% in 2022. Stanford's Larcker identified the reason plainly: "Directors don't have much taste for telling other directors they aren't doing a good job." 

In nonprofit boards, where directors are typically volunteers and social relationships are central to board culture, this dynamic is even more pronounced. BoardSource's own FAQ acknowledges that directors can select "N/A / Don't know" on any question in its BSA tool — effectively allowing directors to opt out of revealing knowledge gaps without consequence.

What a More Rigorous Approach Would Require

The research points clearly toward what current evaluation models are missing. Addressing the gap does not require discarding existing frameworks — it requires augmenting them with methods that move from perception to demonstration.

First, governance assessment must test judgment, not just solicit it. Scenario-based questions — presenting realistic governance dilemmas and asking directors to reason through them — reveal how directors actually think under conditions that resemble the situations in which governance fails. A director who rates themselves highly on conflict-of-interest management, but who cannot identify the governance risk in a realistic scenario involving a donor who is also a vendor, has told us something important. A rating scale cannot tell us that.

Second, responses must be evaluated against verified governance standards. The interpretation of director responses — whether narrative or interview-based — needs to be calibrated against what fiduciary duty, regulatory requirements, and governance best practice actually demand, not against what sounds reasonable or reflects consensus. This requires either deep subject-matter expertise in the evaluator, or tools designed to apply consistent governance standards across responses.

Third, the board-level pattern matters as much as individual responses. The most valuable diagnostic is not whether one director knows the answer, but whether the board collectively has the knowledge it needs to govern effectively — and where the gaps are distributed. A board where every director rates risk oversight highly, but where responses to scenario-based questions reveal consistent blind spots around financial controls, has a governance problem that no individual rating would surface.

Fourth, the evaluation must connect explicitly to Director education. The current model ends with a report and, in the best cases, an action plan. That is necessary but not sufficient. If assessment reveals that directors lack knowledge in a specific governance domain, the response cannot only be recruitment — it must include structured education with follow-up assessment. The evaluation must be the beginning of a learning cycle, not a periodic compliance exercise.

Conclusion

Governance board evaluation has matured considerably over the past two decades. The shift from informal self-reflection to structured assessment, the addition of interviews, the emergence of external facilitation, and the growing use of three-tier evaluation frameworks all represent genuine progress. The governance field deserves credit for taking board effectiveness more seriously than it once did.

But the foundational methodology — asking directors to rate their own performance — has not kept pace with what governance research tells us about the gap between director self-perception and actual competence. The Spencer Stuart confidence gap data, the Korn Ferry admission that evaluation processes are not translating into governance improvement, and the academic literature's acknowledgment that self-reported information is a poor proxy for performance — taken together, these point to a field that has optimized its existing approach without questioning its core assumption.

That assumption is that directors know what they know. The evidence suggests otherwise. Closing the gap between governance assessment and governance knowledge will require methods that treat director competence as something to be demonstrated, not declared.

References

• BoardSource. Board Self-Assessment (BSA) for Nonprofit Governing Boards. boardsource.org

• BoardSource. Leading with Intent: BoardSource Index of Nonprofit Board Practices. (Biennial, 30+ years)

• Korn Ferry / Gibson, Dunn & Crutcher. Annual State of Board Evaluations in the U.S. 2025. Harvard Law School Forum on Corporate Governance, December 2, 2025. corpgov.law.harvard.edu

• Korn Ferry. Board Evaluations: One Step Forward, One Step Back. kornferry.com, February 2024.

• Korn Ferry. Board Directors and Their Missing Report Cards. kornferry.com, November 2024.

• Larcker, David. Quoted in Korn Ferry, Board Evaluations: One Step Forward, One Step Back, 2024.

• Spencer Stuart. 2025 U.S. Spencer Stuart Board Index. spencerstuart.com, November 2025.

• Spencer Stuart. Closing the Confidence Gap: Why the Board–CEO Relationship Needs a Reset. 2025.

• Weil, Gotshal & Manges LLP. Guide to Nonprofit Governance 2025. weil.com, May 2025.

• American Accounting Association. Good Governance in Not-for-Profit Organizations: A Review of the Literature on Boards of Directors. Journal of Governmental & Nonprofit Accounting, Vol. 13, No. 1, December 2024.

• National Council of Nonprofits. Self-Assessments for Nonprofit Boards. councilofnonprofits.org

• Independent Audit. Thinking Board Platform. independentaudit.com

Jim Crocker is an AI governance consultant and board director. He writes about what boards and senior executives need to know about AI at jimcrockerai.com. Here is Jim's LinkedIn profile.