We like to believe that Nordic corporate governance is among the best in the world. We have codes, recommendations, committees, and beautifully written principles. And yet, one of the most critical elements of governance is still handled in a surprisingly superficial way: board evaluations.

In most listed companies, a board evaluation still means an annual self-assessment questionnaire, if any. A few boxes are ticked. A scale from one to five is used. And somehow, year after year, the result is almost always the same. The board rates itself at 4.8.

That number should worry every shareholder.

A board does not exist for its own comfort. It exists to represent the owners. It is entrusted with strategic oversight, CEO support, supervision, and decisions that can easily influence hundreds of millions in shareholder value. Yet the way boards assess their own performance would be unacceptable in almost any other part of the organisation.

If employees were evaluated the same way boards evaluate themselves, management would not accept it.

What makes this even more puzzling is that we already know how to do this properly. External financial audits are a non-negotiable, annual ritual. No one asks whether the company can “afford” them. No one suggests doing them lightly every four years. They are done every year, by an independent party, precisely because independence matters.

Board evaluations should follow the same logic. Instead, they are often handled internally, given cursory attention by the nomination committee, and effectively invisible to shareholders. The Finnish Corporate Governance Code recommends an annual evaluation of board performance and working methods. The evaluation may be conducted internally or externally, and the practice of conducting the evaluation must be described in the corporate governance statement, or explicitly explained if the recommendation is not followed, under the “comply or explain” principle.

Why does this fail?

Part of the answer is comfort. Board members are experienced, respected people. Arguably, no one enjoys hearing that their behaviour shuts down discussion, that their thinking is no longer operationally relevant, or that their presence adds less value than it once did. Another part is fear. Truly honest evaluations require anonymity, trust. and a skilled external facilitator. Without that, difficult truths remain unspoken.

And then there is the most common excuse of all: cost.

This is where the logic collapses. Boards routinely influence decisions worth tens or hundreds of millions, yet hesitate to invest a relatively modest sum in improving how they themselves function. The irony is painful. A well-run board is not a cost to the company. It is one of the highest-return investments a company can make.

In my experience, there are three fundamentally different types of board evaluations. The lightest is a simple self-review survey. It creates the illusion of reflection but rarely produces insight. A more advanced version combines structured questions with written commentary and can already surface useful signals. The most effective approach, however, combines a confidential survey with individual interviews conducted by an independent external evaluator.

This is where real value emerges.

When board members are interviewed one-on-one, anonymously, and with professional facilitation, patterns appear. A chairperson who dominates the discussion and speaks too early. A board member who has become quiet and disengaged. Another who opposes ideas reflexively and discourages debate. Skills that were once relevant but no longer match the company’s strategic reality. 

These are not personal attacks. They are governance issues. And they rarely surface without an external process that people trust.

A proper evaluation produces one clear report. Not multiple versions softened for different audiences. One honest synthesis that goes first to the nomination committee, then to the chair. Personal feedback is discussed privately. Development actions are agreed. And six months later, progress is checked.

Importantly, the evaluation also looks forward. What competencies will this board need in three to five years? How will AI, regulation, geopolitical risk, and strategic complexity change what good board work looks like? Who is still current, and who is slowly becoming obsolete? These are uncomfortable questions, but avoiding them does not make them disappear.

I have seen chairs genuinely change their behaviour when feedback is clear, fair, and professionally delivered. I have seen boards become more effective teams when unspoken tensions are finally addressed. And I have seen companies benefit when boards take their own development as seriously as they take management oversight.

The core problem in Nordic governance is not a lack of rules. It is a lack of ambition in how those rules are applied.

Board evaluations should not be a ceremonial exercise repeated every four years. They should be a continuous, annual process, comparable in rigour and independence to financial auditing. Shareholders deserve to know not only who sits on the board, but how well that board actually functions.

Good governance is not about optics. It is about effectiveness.

If Nordic companies want boards that truly add value, three changes are overdue.

• First, board evaluations should be conducted annually by an independent external party, not internally.

• Second, nomination committees must treat evaluation results as a real input into board composition and development, not as a formality.

• Finally, a meaningful summary of the board’s performance and development areas should be communicated to shareholders as part of normal governance reporting.

Anything less falls short.