10.4.4 Evaluation

The UKCGC, DCGC and SCCG all require having an annual evaluation, but the details in the three countries differ. In the United Kingdom and the

Netherlands the requirements regarding evaluation focus on the performance of the (supervisory) board, its board committees and the individual members, whereas in Sweden only the board itself needs to be evaluated. An evaluation of the board committees as well as individual members is more thorough and will result in a better evaluation of all the elements of the board. In addition to the annual evaluation, the UKCGC requires that an external evaluator carries out the evaluation every three years. Such an external evaluation is not required in Sweden and the Netherlands, but in the Netherlands it is suggested having an evaluation conducted by an external evaluator. It might be beneficial to hire an external evaluator, because he is not hampered by colleague relationships and he has a fresh view. With respect to disclosure, there is also a difference between the three countries. In the United Kingdom and the Netherlands the methodology should be published in the annual report, whereas the SCCG only requires communicating the results to the nomination committee. Disclosure of the methodology in the annual report improves the transparency towards shareholders and other stakeholders, which is important for monitoring the board.

(Consideration 10.9) A transparent annual evaluation process of the total (supervisory) board, board committees and members is important for a robust preconditions building block of independence. Disclosure of the methodology and a periodical review by an external evaluator contribute to the strength of the evaluation. The requirements of the UKCGC are very good and the DCGC should also include requirements about external evaluations. The SCCG should broaden the evaluation ’s scope by considering board committees and members, and should require disclosure in the annual report.