More Australian corporate boards are commissioning external performance reviews, sometimes costing up to $150,000, to satisfy investor and regulatory expectations for transparency. These reviews are meant to uphold accountability at the highest levels of governance, although critics claim they often become costly box-ticking exercises with limited practical benefit.
Independent assessments typically involve consultants interviewing directors and executives, observing meeting dynamics and conducting confidential surveys. The push for such evaluations has grown since regulators, including the Australian Prudential Regulation Authority, proposed mandatory reviews for major institutions at least every three years. However, scepticism is building due to the lack of consistent quality and low barriers to entry that may compromise their effectiveness.
Although these reviews aim to improve board performance, some experts argue the market is saturated with consultants offering generic questions and little meaningful insight. Directors often prefer firms connected to legal groups or experienced advisors who provide deeper analysis. Still, some believe the real problem lies beneath the surface, as ineffective boards might not be improved through external advice alone.
While many boards use these evaluations to address sensitive team dynamics and drive improvement, doubts remain about their true impact. Critics suggest that weaker boards may rely too much on consultants instead of enhancing internal accountability. Others believe effective results depend on active leadership by board chairs and tailored methodologies, rather than templated solutions or artificial intelligence tools.
The wider issue is that lacklustre boards may not only risk financial failure, they could also gradually weaken companies through missed opportunities and prolonged underperformance. As transparency remains a critical demand from shareholders and regulators, the appetite for these reviews is likely to persist. Even so, the sector may require stronger standards to ensure genuine value.
