Beyond compliance: Transforming board assessments from check-box exercises to accountability drivers

In boardrooms across the world, a quiet crisis is unfolding.

Directors privately acknowledge performance concerns among their peers, while annual board evaluations become a compliance ritual, rather than accountability mechanisms.

However, this disconnect is not unique to Nigeria, as recent global governance research reveals that more than half of corporate directors believe at least one of their colleagues should be replaced, which is a clear sign of performance concerns at the board level.

MoreStories

Exchange rate is back at N1,400: Why it could stay there

March 10, 2026

How the Iran war could unravel Tinubunomics

March 9, 2026

Against this backdrop, Nigerian boards must decide whether the Code of Corporate Governance 2018 (NCCG), under Principle 14, will lead to genuine accountability or remain a regulatory checkbox that protects no one.

Where evaluation processes fail to convert honest assessment into corrective action, the consequences extend far beyond the boardroom, exposing organisations to regulatory sanctions, reputational damage, and loss of investor confidence.

The real cost of assessment failures

In many Nigerian boardrooms, there is a common assumption that conducting an evaluation satisfies both the regulator and the board’s fiduciary duty, which is proving costly.

From a regulatory perspective, the Financial Reporting Council and other sector-specific regulators in Nigeria are intensifying scrutiny of board effectiveness. The recently enacted Investment and Securities Act (2025) grant the Securities and Exchange Commission expanded enforcement powers over non-compliant boards.

For financial institutions, the consequences are even more direct. The Central Bank of Nigeria’s removal of the First Bank board in 2021 revealed how board ineffectiveness and internal conflicts of interest can trigger immediate regulatory intervention.

With multiple governance codes now in place, such as the FRC Code and the revised CAMA 2020, recurring governance failures should no longer be commonplace. Yet they persist, because boards treat evaluation as a compliance exercise rather than a performance analysis.

From a business perspective, the cost is equally concrete. Companies with robust governance attract more investment capital and secure better financing terms, while boards that conduct evaluations with no meaningful change create not just a compliance failure, but a competitive disadvantage.

**The global evidence: Board crises in numbers **

The data on global governance proves that this dysfunction is widespread. The data from PwC’s 2025 Annual Corporate Directors Survey of over 600 U.S. public company directors paint a disturbing picture of this dysfunction:

• 55% of directors believe at least one colleague should be replaced (up from 49% in 2024)
• 78% of directors believe that their board assessment process doesn’t provide a complete picture of overall board performance.
• Only 22% of boards use external facilitators to lead the assessment process.
• Nearly 73% of directors say their boards DO NOT conduct individual director assessments.

The drivers of these dissatisfactions are clear 41% point to directors who fail to contribute meaningfully to discussions, while 34% identify diminished performance from long tenure. However, despite these performance gaps, 51% of directors admit their boards are not well-invested in the assessment process.

Rules on paper, gaps in practice: The reality of board evaluation in Nigeria

The Nigeria Code of Corporate Governance (NCCG) 2018 requires annual evaluation of the board as a whole; committees, chairman, and individual directors, with external facilitation at least once every three years. However, a gap remains between regulatory expectations and boardroom practice, despite this framework.

The following are four common obstacles to effective board evaluation:

To start with, _conflict of interest _remains a recurring problem. Reviews of major corporate failures in Nigeria, especially within the banking sector, highlight insider loans, non-disclosure of directors’ interests, and unclear ownership structures as board dysfunction.

In many organizations, directors serve on multiple boards and share long-standing personal ties. In such environments, members are unlikely to honestly assess colleagues with whom they share financial or personal ties.

Transparency culture also remains uneven. Findings reveal that the refusal to make full disclosures is unfortunately common in the Nigerian business environment. This extends directly into board evaluation, as assessment results are treated as sensitive internal matters and rarely communicated to shareholders.

In addition,_ governance knowledge_ gaps cannot be ignored. Many Nigerian directors are accomplished business leaders, founders, or politically connected figures. However, governance expertise does not automatically accompany commercial success.

Nigeria, for example, faces challenges, such as a lack of awareness and understanding of corporate governance among key actors.

Where directors lack a strong grounding in fiduciary duties, oversight responsibilities, and board performance standards, evaluation risks becoming a procedural exercise rather than a rigorous performance review.

Finally, even where directors possess governance knowledge, Nigerian corporate culture creates strong cultural barriers for open evaluation.

In a culture where respect for seniors and the status quo is deeply ingrained, board chairs are not usually trained to give constructive criticism to senior colleagues, and directors are reluctant to give honest peer evaluations.

The collegiality trap: Why board assessments fail

The core of the assessment crisis is a dynamic that goes beyond the governance codes, to the board’s ability to prioritise harmony over accountability. This is a problem on boards all over the world, but in the Nigerian corporate culture, where respect for seniority is very much active, this challenge is particularly severe.

The best board assessments are not fault-finding exercises, but rather organised procedures that are aimed at enabling boards to deliver their best.

However, most board chairs are not trained to have challenging performance discussions, and directors fear that open feedback will hurt professional relationships or threaten board harmony.

Consequently, the evaluation process itself becomes compromised. Research shows that less than half of S&P 500 boards conduct individual director assessments, and even fewer use them to drive actual board composition decisions.

This dysfunction is even more dangerous when combined with skills mismatches, as only 32% of executives believe their boards have the right mix of skills and expertise.

A roadmap for effective board assessment

Addressing the board assessment problem requires more than acknowledging the problem.

According to PwC, 88% of directors believe they can take at least one action to improve their boards’ effectiveness, with 45% citing additional education or training on key topics, 33% focusing on strengthening relationships with fellow board members, and 25% committing to encourage more diverse viewpoints or innovations.

For boards seeking to move beyond mere compliance to genuine transformation, the following steps can strengthen the rigour and impact of board evaluations:

1. Embrace external facilitation: While the NCCG requires external facilitation only once every three years, leading boards use independent facilitators far more frequently. External facilitators bring objectivity, experience across multiple boards, and the ability to ask uncomfortable questions that most internal evaluations gloss over. Also, they can conduct confidential one-on-one interviews with directors to address issues too sensitive for peer questionnaires.

2. Make individual director assessments mandatory: Board-level assessments alone cannot drive change. Principle 14 of the NCCG Code explicitly requires the evaluation of individual directors; however, this remains the most ignored part of board evaluation in practice. Hence, individual assessments should evaluate, and substantiate contribution to discussions, relevant expertise for strategic challenges, and willingness to challenge management constructively.

3. Link assessments to board succession planning: Effective evaluation should feed directly into succession planning. When skills gap analyses reveal that the board lacks expertise in digital transformation, cybersecurity, or climate risk, the Governance/Nominating Committee should develop a multi-year succession plan to address these gaps. This could involve planned retirements of long-tenured directors, expansion of board size to accommodate new expertise, or both.

4. Create an open culture through board chair leadership:  The board chair plays a pivotal role in determining if evaluations lead to real improvement or remain a formality. Thus, chairs must create an environment where directors can provide honest feedback and be willing to directly address performance gaps. Additionally, evaluation outcomes should be discussed openly by the full board, with clear action points and timelines.

5. Measure what matters: Board evaluations should move beyond process checks to assess substantive effectiveness. Beyond questions about meeting logistics, the evaluation should focus more on the mix of skills, experience, objectivity, board members ‘competence, and alignment with sustainability objectives.

Conclusion: From compliance to transformation

The global board assessment crisis reveals an uncomfortable truth that board directors must address, and Nigerian boards stand at a crossroads, to either treat Principle 14 of the NCCG as a compliance checkbox or embrace evaluation as a tool for continuous improvement through rigorous assessment processes.

The data is revealing. While 55% of directors globally believe at least one colleague should be replaced, 88% concede that they can take concrete actions to strengthen board performance. Hence, the gap between awareness and action is where accountability ultimately lives or dies.

Consequently, the boards that will succeed in Nigeria’s evolving governance landscape are those willing to embrace honest evaluation not as a regulatory burden, but as a competitive advantage.