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How benchmarking board effectiveness can drive organisational performance in the health sector

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How benchmarking board effectiveness can drive organisational performance in the health sector

Good governance is fundamental to achieving and maintaining high organisational performance. Boards in the health sector, as the highest level of governance accountable for organisational performance, set the standard for organisational governance. Benchmarking against other boards assists boards to understand and improve their performance and strengthen their governance effectiveness.

The Nous board effectiveness and climate evaluation survey assists boards to understand and improve their performance.

Nous Group (Nous) has developed a board effectiveness and climate evaluation survey to assist health sector boards to understand and improve their performance. In using the survey organisations self-assess their performance across key domains of board effectiveness.

Nous has created benchmark scores from surveys conducted by the boards of local health districts, health service providers and other health organisations in New South Wales and Victoria between 2010 and 2016. These benchmark scores allow boards to assess their self-assessed performance against benchmarked data from other health boards.

Effective governance is built on five core elements.

Nous’ board effectiveness and climate evaluation considers the core elements of good governance. We believe that the best governance systems serve organisations in five ways:

  1. Setting and leading strategic direction regarding mission, strategy and culture
  2. Providing clarity and efficiency regarding roles and decision rights
  3. Fostering effective relationships at the board level, with executives and other key stakeholders
  4. Defining and allocating accountability, maintaining governance integrity and managing risk, and
  5. Ensuring board capability and leadership.

These core pillars of good governance must co-exist, as the absence of any one will weaken governance effectiveness. As organisations need flexibility to respond to their specific context, ‘The Five Pillars’ model focuses on the outputs required from a governance system, rather than prescribing a set of particular processes. The figure below outlines Nous’ approach to board governance.

Nous five pillar model for board governance

The effectiveness and climate evaluation survey measures key domains of board performance.

The Nous board effectiveness and climate evaluation survey measures board effectiveness against a series of questions to explore elements of each of the five pillars. The survey also has questions against the three further domains of:

  • overall effectiveness
  • succession planning
  • performance of the chair.

In all, the survey explores over 40 different dimensions of board effectiveness.

Where do boards perform well and less well?

Nous has compiled benchmark scores, and the range of scores, against each of the survey questions. These results show that there is a wide range in self-assessed board performance against most measures, but clear differences in benchmark scores across the domains. The highest and lowest scoring domains, as well as the areas where there is most variability between boards are outlined in the figure below.

These survey benchmarks can assist boards to assess their effectiveness relative to a significant number of similar boards. Nous can assist your organisation to conduct the survey, and to identify strategies to address areas where effectiveness could be improved. We have worked with many other organisations to review broader organisational governance and performance and can correlate the survey results with assessments of other aspects of organisational governance and performance to drive improved performance.

Get in touch to find out more about Nous' experience in optimising board performance and in the health sector.