In the latest annual review of Corporate Governance conducted by Grant Thornton they noted that the shape of the board evaluation market was changing. In the past a small number of providers dominated the market – especially for companies in the FTSE 350. In 2018 one provider conducted 30% of all FTSE 350 Board evaluations. Last year, whilst Grant Thornton found that the top two providers were still responsible 38% of the market, 34 organisations were working with FTSE 350 companies on their board evaluations – including divisions of accounting firms, search companies, academics and one-person specialist firms. In the wider market for board evaluation amongst public sector bodies and charities the range of providers is even more diverse.
The breadth of the market and the low barriers to entry mean that for a chairman or company secretary who is thinking about issuing an ITT or selecting a supplier for an upcoming evaluation market there are a lot of different approaches and people with very diverse experience to choose from. Whilst this diversity could be seen as enabling competition and innovation it can also be very confusing and make the selection process for what is a significant and sensitive piece of work in the board lifecycle seem like a bit of a lottery. And with those low barriers to entry meaning it’s difficult to maintain high quality standards across the market a selection lottery is not what a board wants when choosing an evaluator. Continue reading “Evaluating the evaluators”