ACCA Strategic Professional · Strategic Business Leader · The board of directors
Kestrel Foods plc has a board that has not changed in 12 years. Directors rarely challenge the chair, and the nomination committee has never reviewed whether the mix of skills matches the company's new digital strategy. Which governance mechanism would most directly address both concerns?
A formal, periodic board evaluation is the most direct fix. It assesses composition, skills mix and challenge within the board, and its findings inform nomination and succession planning. Fee increases, more frequent meetings or giving an executive a deputy chair role do not test whether the board suits the new strategy.
- AA formal, periodic board evaluation covering composition, skills and dynamics, with results fed into succession planningCorrect
- BAn increase in the non-executive directors' fixed fees to reward loyalty
- CMoving board meetings from quarterly to monthly without changing the agenda
- DAppointing the finance director as deputy chair
Explanation
A structured board evaluation examines whether the board has the right skills, independence and dynamics, and its findings feed nomination and succession decisions. Higher fees do not test skills or challenge. More meetings with the same agenda does not address composition. Making the finance director deputy chair concentrates power further.
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