http://www.boardroompro.net/managing-conflict-of-interest-at-board-level-4-things-to-know/

Few governance-related issues are more difficult than evaluating board performance. Assessment of board performance is more of an art than science due to an interconnected link between management, the firm and board performance. It’s also not always easy to determine. A board might be doing a great job of overseeing a company but shareholders are not happy about the poor return on their investment. The board could have acquired management and governance issues and is working hard to change the situation. It may have also invested in new strategic initiatives or formulated an overhaul strategy.

In other instances boards can become too involved in operational aspects and take decisions that should be left to the management. These situations are made even more challenging when the board does not use an ideal process for the evaluation of its members. Without a formalized evaluation system in place, it is easy for minor problems to become serious that compromise the effectiveness of the board.

The board may have developed an informal culture that doesn’t take its responsibilities for performance assessment seriously. It could be that the board isn’t equipped to collect performance data or the boardroom expertise required for executing its responsibilities in evaluating.

Boards should not only have the necessary skills, but also be open to the findings of the evaluation. The board should determine areas that need improvement and work with the management team to formulate a plan of action. This could include regular board trainings to increase knowledge across the board.