Most boards already run some form of annual evaluation. Far fewer run one that directors privately rate as useful. The gap usually has little to do with the questionnaire and everything to do with how findings are gathered, framed and followed through. This guide sets out how to run a board effectiveness review that produces honest insight, satisfies the expectations of the UK Corporate Governance Code, and gives the chair an action plan they can credibly own.
Why annual evaluation is a Code expectation
The UK Corporate Governance Code is explicit: there should be a formal and rigorous annual review of the performance of the board, its committees, the chair and individual directors. The 2024 edition of the Code applies to financial years beginning on or after 1 January 2025, so for most companies with a December year end the first reports under the new wording arrive in 2026.
One change in the 2024 Code is worth noting because it reframes the whole exercise. The Financial Reporting Council (FRC) replaced the language of "board evaluation" with "board performance review" throughout the relevant section. The intent, as the FRC and commentators have explained, is to counter the perception that a review is a backward-looking assurance tick-box. It is meant to be a forward-looking, continual process of improvement. That distinction matters for how you design and communicate the round: directors engage far more candidly when the purpose is "how do we get better" rather than "did we pass".
For premium-listed companies the Code operates on a comply-or-explain basis, so a review is not strictly mandatory. But explaining the absence of a credible annual review to investors and proxy advisers is an uncomfortable conversation, and one most chairs would rather not have. If you want a fuller orientation to the Code's expectations on board composition, succession and reporting, our company secretary's guide to the 2024 Code sets out the wider context.
Internal vs external reviews (and the three-year FTSE 350 rule)
The Code distinguishes between reviews the board runs itself and reviews facilitated by an external specialist. For FTSE 350 companies, the chair is expected to commission a regular externally facilitated board performance review, and this should happen at least every three years. The external reviewer should be identified in the annual report, together with a statement of any other connection it has with the company or individual directors. So in a typical FTSE 350 cycle you might run two internal reviews and one external review across three years.
Why the rotation? Internal reviews are cheaper, faster, and build institutional familiarity with the process. Their weakness is candour: directors are more guarded when the company secretary or chair is the one collecting and interpreting responses, and blind spots in the board's own self-perception tend to persist. An external facilitator brings independence, peer benchmarking, and the licence to ask uncomfortable questions, particularly about the chair's own effectiveness and boardroom dynamics that insiders rarely raise.
If you do commission externally, choose a reviewer with care. The Chartered Governance Institute's Code of Practice for board reviewers gives a useful benchmark for quality, independence and method, and asking a prospective facilitator how they meet it is a reasonable due-diligence question. Be wary of conflicts: a firm that also sells the board executive search, audit or consultancy services is harder to disclose cleanly in the annual report.
For smaller and unlisted organisations, the three-year external expectation does not formally apply, but the underlying logic still holds. Periodic external challenge, even every four or five years, guards against the slow drift that internal-only reviews can mask.
Designing the right questions: board, committees, chair, individual directors
A review that asks only "how is the board doing?" produces vague answers. The Code expects four distinct lenses, and each needs its own line of enquiry.
- The board as a whole. Composition and balance of skills, the quality of information and papers, the use of board time, the calibre of debate, the relationship with the executive, and oversight of strategy, risk and culture.
- Committees. Audit, remuneration and nomination committees each warrant tailored questions. Audit committees in particular face heightened expectations on internal controls under the 2024 Code (the relevant internal-control reporting provision applies for financial years beginning on or after 1 January 2026).
- The chair. Stewardship of meetings, fostering of constructive challenge, relationship with the chief executive, and succession planning. This is where an external facilitator earns their fee.
- Individual directors. Whether each director continues to contribute effectively and demonstrate commitment, including time commitment. This connects directly to re-election recommendations and is sensitive enough to merit a separate, confidential process. Our guide to non-executive director appraisal covers how to handle individual reviews constructively.
Two emerging areas deserve explicit questions. First, diversity and inclusion: against the backdrop of the FTSE Women Leaders Review and the Parker Review's ethnic-diversity targets, boards should assess not just headline composition but inclusion in practice. A board skills matrix and audit is the natural companion exercise here. Second, technology and AI oversight: as boards take on responsibility for AI governance under frameworks such as ISO/IEC 42001 and the EU AI Act, the review should test whether the board genuinely understands the risks it is signing off. We explore this in our piece on board oversight of AI governance.
Collecting candid input without survey fatigue
Senior directors are time-poor and have completed enough questionnaires to recognise a box-ticking exercise on sight. Candour is the scarce commodity, and you protect it through design.
Keep instruments short and purposeful. A focused questionnaire of well-chosen questions beats an exhaustive one that respondents rush through. Mix quantitative ratings (useful for tracking change over time) with open free-text prompts (where the real insight lives). Wherever possible, complement the survey with confidential one-to-one conversations; the most valuable observations are rarely written down.
Confidentiality is non-negotiable. Directors must trust that individual responses will not be attributed without consent. Aggregate small-population results carefully so that a single dissenting voice cannot be identified, and be transparent about who will see the raw data. Because responses can constitute personal data, handle them in line with UK GDPR and ICO guidance on data minimisation and retention, and avoid retaining identifiable transcripts longer than the process requires.
Finally, time the round sensibly. Running the review well ahead of the year-end reporting cycle leaves room to act on findings rather than scrambling to write them up.
From findings to a board-ready action plan
This is where most reviews fail. A thoughtful set of findings that produces no change erodes trust faster than no review at all, because directors conclude the exercise is theatre.
Translate findings into a short action plan the chair can present and own. Effective plans share a few characteristics. They prioritise ruthlessly: three or four meaningful actions beat fifteen aspirations. Each action has a named owner (usually the chair, senior independent director or committee chair, supported by the company secretary), a target date, and a clear definition of what "done" looks like. The plan distinguishes quick wins, such as restructuring board papers, from structural matters, such as succession or refreshing committee membership, which may run over a year or more.
Be honest in the boardroom about what the review found, including the uncomfortable parts. A review that surfaces only strengths is not credible, and directors know it. The chair's willingness to name and address a genuine weakness is, paradoxically, what earns the process trust.
For listed companies, remember that the annual report should describe how the review was conducted and the action taken as a result. Investors increasingly read this disclosure as a signal of board quality, so write it as a substantive account of what changed, not boilerplate.
Tracking progress between rounds
A review is a snapshot; effectiveness is a trajectory. The action plan should return to the board at intervals through the year, typically as a standing item, so progress is visible and owners are accountable. This rhythm also makes the next review far easier: you begin by reviewing what you committed to last time and whether it stuck.
Tracking longitudinally also lets you see trends the single-year view hides. Where you use consistent rating questions year on year, you can watch whether a concern is improving, plateauing or worsening, which is precisely the "continual improvement" posture the 2024 Code's language was designed to encourage. Keeping the action plan, the prior findings and the evidence of follow-through in one place turns the review from an annual event into a governance discipline.
Run well, a board effectiveness review is one of the highest-leverage hours a board spends all year: it sharpens focus, surfaces what no one wants to say in the room, and gives the chair a defensible mandate to act. If you would like to see how BoardServe supports the full cycle, from candid data collection to a board-ready action plan and longitudinal tracking, get in touch.