Supervisory board evaluation is an internal procedure intended for systematic evaluation of the work performed by a supervisory board (questionnaire or matrix) with respect to existing good practices and with a certain degree of healthy self-criticism. Its purpose is not to provide a good grade, but to identify the areas of supervisory board operations that are in need of improvements. A supervisory board evaluation procedure that does not surpass the administrative approach and is not conducted properly brings no added value to the quality of the work performed by a supervisory board and will not yield desired results.
Public limited companies and companies with capital assets of the State are subject to it based on reference codes, while banks and financial institutions are subject to it based on an executive regulation
Good practice recommendations:
- Supervisory Board Assessment Manual, 2011
- Instructions for completing the self-assessment matrix on board evaluation, 2015
- Matrix for the board evaluation, 2018
- Self-evaluation Questionnaire for the Audit Committee, 2017
Research and Studies:
- International experience and trends on board evaluations, Chris Pierce, 2014
COOPERATION WITH SDA – OUTSIDE VIEW, EDUCATION, COMPARISON
The purpose of SDA methodology for supervisory board evaluation, as presented in the manual, is to standardise the approach to the evaluation of the effectiveness of supervisory and management boards in Slovenia, thus making the content and process of evaluation comprehensible for supervisory board members, shareholders and investors. On the other hand, supervisory and management board members are provided with a tool for improving the effectiveness and quality of supervisory and management board operations and corporate governance within a company. The manual allows one to understand the evaluation process and provides answers to the most frequently asked question
- Eles, d.d., Geoplin, d.d., HIT, d.d., HSE, d.o.o.,Nova Ljubljanska banka, d.d., NLB Vita, d.d., Petrol, d.d., Pošta Slovenije, d.o.o., Telekom Slovenije, d.d., Zavarovalnica Triglav, d.d.
- external SDA experts are the co-authors of SDA methodology with several years of working experiences in supervisory boards
The cooperation of external experts brings a certain level of objectivity in the procedure and, furthermore, the standardised evaluation matrix needs to be tailored to the specifics of a company and supervisory board. It is recommended that a supervisory board evaluates its work in cooperation with an external expert at least once during the term of office.
Added value from cooperation with an external expert:
- independent, professional and comprehensive conduct of the procedure under top professional standards;
- comprehensive approach to realisation using SDA methodology (presentation of the purpose of the procedure, preparation of a report on results, a training workshop with a presentation of results, and the preparation of a plan of improvements and activities for the supervisory board);
- adjustment of the matrix content for supervisory board evaluation to company specifics;
- online completion of matrices provides anonymity and is simple;
- training workshop* – presentation of the results of actions (open discussion, training on legislative developments and trends, a review of all company documents, examining the understanding of the matrix, comparison with other supervisory board, etc.);
- preparation of an action plan for SB.
*For holders of the SDA Certificate, attendance at the workshop is considered as completed training for renewing the SDA Certificate.
SDA methodology with a matrix is adjusted to company specifics: STATE-OWNED COMPANIES, LISTED COMPANIES, BANKS, INSURANCE COMPANIES, AND OTHER PRIVATE COMPANIES