Evaluation of the performance of the highest governance body

Disclosure focus

Disclosure 2-18 requires an organization to describe the processes used to evaluate the performance of its highest governance body specifically in overseeing the management of the organization’s impacts on the economy, environment, and people.

A general Board or governance-body effectiveness review is relevant only to the extent that it includes this impact-oversight dimension. The evaluation can also address broader governance matters, but the organization should explain how the performance of the highest governance body in overseeing impacts is assessed.

The highest governance body is the governance body with the highest authority in the organization. The term “Board” should be used only where the Board is the organization’s highest governance body. Evaluations of individual members, the Chair, or committees can form part of the overall process, but they do not replace evaluation of the performance of the highest governance body as a collective body.

The organization must report whether each evaluation is independent or not and state its frequency. Where an external party is involved, the organization should explain the party’s role and the basis for classifying the evaluation as independent. An externally facilitated or externally supported evaluation should not automatically be described as independently conducted.

Where different evaluation processes operate, such as an annual internal self-evaluation and an independently conducted external evaluation every three years, the independence status and frequency of each process should be reported separately.

The organization must describe actions actually taken in response to the evaluations, including changes to the composition of the highest governance body and organizational practices. Recommendations, planned actions and implemented actions should be distinguished clearly.

If no changes were made to the composition of the highest governance body or to organizational practices, the organization should report this directly. Changes to committee membership or committee structure should not automatically be presented as changes to the composition of the highest governance body.

Disclosure 2-18 does not prescribe individual scores, ratings, pass/fail results, participation percentages or quantitative tables. Sensitive individual evaluation results do not need to be disclosed. Aggregate information on the process and the resulting actions is generally sufficient.

If the organization does not have an evaluation process, it should report this fact directly. Reasons for omission are permitted for Disclosure 2-18 only where required information cannot be reported. In that case, the organization must identify the affected requirement and provide an applicable reason for omission and the required explanation in its GRI content index.

This LRA educational guidance supports disclosure preparation. For the exact requirements, always refer to the official GRI source.