KPMG in Malaysia has developed a Digital Board Effectiveness Evaluation (“BEE”) Tool, featuring configured questionnaires, automated reporting and built-in checks customised to each company to improve the board evaluation process and elevate good corporate governance.
Companies that have optimised the board evaluation process are often well-placed to bring about systemic changes, leading to tangible governance and organisational outcomes. It’s to this end that KPMG’s Digital BEE Tool aims to bring.
Driven by the growing appreciation amongst boards on the need to recalibrate their focus in light of the fast changing marketplace, companies have made tremendous effort in recent years to enhance their board evaluation exercises.
“The development of the Digital BEE Tool stems from KPMG’s explorations in leveraging technology to improve efficiency in conventional practices,” said Kasturi Nathan, KPMG’s Head of Governance & Sustainability in Malaysia.
“We recognise that the proliferation of technology still offers plenty of opportunities to streamline and inject novelty to the board evaluation process. It is with that reasoning that we have taken the initiative to provide companies with a methodical and user-friendly platform to enrich the board evaluation exercise.”
Kasturi notes that notwithstanding how the simple act of putting board evaluation on the horizon can create a ripple of change, the revitalisation of the board evaluation process still hinges on synergy with other attendant governance procedures such as orientation and education programs, director nomination process, succession planning, and stakeholder engagement.
“All too often, the performance evaluation of directors is limited to judgments regarding a company’s financial achievements, or disappointments if any, of the previous year. Although important, such a limited view tends to dwell too much on the past, where little can be done to change the status quo. Boards should instead consider a balance of result-based and behavior-focused metrics in their assessment of directors. This provides a clearer picture when it comes to the board’s performance,” she added.
To empower boards to govern effectively, this tool incorporates the following value-added features:
- Data analytics – Score dashboard, trend analysis and repository benchmarking
- Built-in checks – Detection of anomalies, mandatory fields and minimum response time
- Customised questionnaires – Tailored questions based on first-hand boardroom and industry insights
- Automated reporting – Thematic write-ups based on responses gathered
- User-friendly interface – Personalised features, status progress indicator and export functionalities
The tool aims to iron out wrinkles that may be present in a conventional board evaluation exercise such as laborious manual tasks and elongated completion time, propensity of human errors as well as lack of insights generated.
It can also serve to seamlessly tabulate results, surface insights from the responses gathered as well as generate visual aids and customised reports to help boards analyse and interpret the findings. The tool can be deployed for an in-house board evaluation or augmented with advisory services by KPMG practices to facilitate an external evaluation.