As companies prepare for 2026, evaluating the performance of their board of directors could yield some benefits. Boards faced major challenges in 2025, and many companies saw major swings in their stock price—both good and bad. Understanding and evaluating the role each corporate board member played in the growth or decline of the company is a major responsibility of the board and an essential process in maintaining sustained revenue growth and strategic success.
Global consulting firm Korn Ferry recently collaborated with Gibson, Dunn & Crutcher to analyze the board evaluation disclosures of S&P 500 companies as presented in their proxy statements, uncovering trends that could represent governance best practices. Their findings regarding board evaluations among S&P 500 companies revealed:
- The percentage of companies reporting that they conducted a three-tier board evaluation (the board, its committees and individual directors) increased from 47 percent in 2024 to 53 percent in 2025.
- The percentage of companies disclosing that they vary their board evaluation approach annually increased from 36 percent in 2024 to 42 percent in 2025.
- The percentage of companies that disclosed that they conduct individual director evaluations as part of their board evaluation process increased from 50 percent in 2024 to 55 percent in 2025.
- The percentage of companies that disclosed using a third party to support its board evaluation process increased from 35 percent in 2024 to 38 percent in 2025. However, only 81 companies disclosed that they used a third party to conduct interviews with board members, which may be better to get an objective view of performance.
- Unfortunately, only 18 percent of companies reported making changes after board evaluations in 2025 – down from 21 percent in 2024. However, the changes those companies reported making could add value to boards. They include:
- Modifying board and/or committee agendas and materials
- Changing board and/or committee structure and/or responsibilities
- Changing board and/or committee size and composition
- Changing board succession planning and refreshment
Recommendations on Best Practices
The Korn Ferry research included a study of global companies’ board evaluation practices and ended with the following recommendations:
“To improve board performance and accountability, U.S. companies may wish to consider adopting the following global best practices:
- Engage a third-party facilitator at least once every three years and disclose the facilitator’s role in the evaluation.
- Conduct individual director assessments on a regular basis to ensure accountability and personal development.
- Disclose both the evaluation process and its outcomes, including any follow-up actions taken to improve board performance.”
The key issue surrounding evaluations is that corporate boards must emphasize wanting to implement internal policies that will make them better prepared to deal with volatile market conditions and unanticipated changes in government policy such as what directors faced in 2025. With fears of a recession, the continued unknown impacts of AI on employment and company efficiency, the continued impact of tariffs, the potential appointment of a new Federal Reserve chairman who could greatly affect interest rates and other uncertainties boards will have to consider in 2026, it might be wise to conduct a thorough board evaluation to identify areas of strength on your current board and eliminate areas of potential weakness. Changes made now will yield great benefits in 2026.
