How Boards Should Evaluate Their Own Performance

The New York Stock Exchange requires that the boards of all publicly traded corporations conduct a self-evaluation at least annually to determine whether they are functioning effectively. The purpose of the exercise is to ensure that boards are staffed and led appropriately, that board members are effective in fulfilling their obligations, and that reliable processes are in place to satisfy important oversight requirements.

David Larcker is the James Irvin Miller Professor of Accounting and Senior Faculty at the Rock Center for Corporate Governance at Stanford University. He is a co-author of the books Corporate Governance Matters and A Real Look at Real World Corporate Governance.

Brian Tayan is a researcher at the Rock Center for Corporate Governance at Stanford University. He is a co-author of the books Corporate Governance Matters and A Real Look at Real World Corporate Governance.