How frequently should the appraisal of board performance be conducted according to the Higgs report?

The Higgs report recommends that the appraisal of board performance should be conducted once a year. This annual assessment is essential as it allows for a comprehensive review of the board's effectiveness, strategic direction, and governance practices. Conducting this appraisal annually strikes a balance between having enough time to implement changes and improvements while also ensuring that performance is consistently monitored and evaluated.

An annual appraisal aligns with typical organizational practices that aim for meaningful feedback at reasonable intervals, allowing boards to reflect on their contributions and adjust to any changes in the external environment or internal dynamics. This periodic approach enables boards to focus on long-term strategies and relationships rather than getting caught in a cycle of overly frequent evaluations, which could disrupt their ongoing functions and decision-making processes.