Among the resources available to help the board in this process are consulting firms that can assist both in designing the process and facilitating the review. Whichever route is followed, there are four important matters for the board to take into account when designing and conducting the CEO performance review:
- The board will need to decide whether it intends to implement a standard employer/employee appraisal process or a more comprehensive system such as a 360-degree review process. The latter system, because it will seek input not only from the directors but also from the CEO’s peers, subordinates, and some of the organization’s stakeholders, will consequently require more time for planning and execution.
- The performance appraisal process actually begins at least a year before the “face-to-face” performance review meeting takes place because it is at the beginning of the process that the goals and measurements of success are determined and agreed upon by the CEO and the board.
- The board will have to determine early in the process whether it will plan, coordinate, conduct the review itself, or seek the assistance of a third party to provide advice and facilitate the process. If a third party is to be used, it should be involved as early as possible.
- The report drafted at the end of the process should identify not only areas for improvement but also the CEO’s successes, the CEO’s goals for the subsequent year, and the professional development plans for the CEO for the next year.
Finally, it should be noted that the board’s responsibility is to evaluate only the CEO’s performance. Employee evaluations below the CEO level are the responsibility of the CEO and/or other managers in the organization.