High Value CEO Evaluations

A Strategic Imperative: Elevating Board Leadership through High-Value CEO Evaluation

In today’s rapidly evolving landscape, strong governance begins with confident leadership—starting at the top. Yet too often, Boards overlook one of their most powerful tools for ensuring organizational health and sustainability: a high-value CEO evaluation process.

How CEO Evaluation Aligns with the Board’s Responsibility

Hiring a CEO is only the beginning. The Board must actively ensure that the CEO is effectively leading the organization by setting clear expectations, measuring performance against agreed-upon metrics, and providing feedback that enables growth and success. A robust CEO evaluation process is essential to fulfilling this responsibility, as it establishes accountability, alignment, and a roadmap for leadership success. 

Research from the National Association of Corporate Directors (NACD) indicates that only 52% of boards believe they have an effective CEO evaluation process in place, highlighting a critical governance gap.

Case Study: From Crisis to Clarity – Transforming CEO Evaluation

Background

When our client’s CEO left suddenly, the Board was thrust into the unfamiliar role of managing an organization they did not fully understand. With limited engagement permitted by the former CEO and no CEO evaluation process in place, the Board lacked insight into strategic priorities, competitive risks, and business operations. The Senior Leadership Team was also impacted by the sudden departure of the CEO and was forced to operate without clear direction.

The Challenge

In the wake of this disruption, the Board had to assess the organization’s state and risks while beginning a search for a new CEO. Upon hiring the new leader, the Board faced another challenge: defining success. The incoming CEO requested performance goals and a process for structured feedback—underscoring the need for clarity, accountability, and collaboration.

The Solution

Our client engaged Catapult to lead the CEO search and design a comprehensive CEO evaluation and compensation review process. Working with a newly formed Board Committee, Catapult:

  • Developed an evaluation philosophy to guide the purpose and scope of CEO performance assessments.
  • Defined clear performance metrics and annual goals across six key categories, linking short-term outcomes to long-term strategy.
  • Established regular reporting expectations for Board meetings.
  • Created a structured timeline and feedback loop for Board input.
  • Designed a methodology for compiling feedback into a meaningful annual report.
  • Facilitated a robust discussion of the CEO’s performance and aligned compensation decisions.

While the Board was Catapult’s client, engaging the CEO in the design process was essential to alignment and success.

The Outcome

This process gave our client:

  • Clarity and alignment between the Board and CEO on strategic priorities, opportunities, risks and short & long term success metrics.
  • A transparent framework for evaluating the CEO’s performance.
  • Stronger Board oversight and engagement.
  • A sustainable governance model to support future leadership transitions.

“A well-executed CEO evaluation is a game-changer for Boards. It builds trust, accountability, and a shared vision for success.” — Korn Ferry CEO Succession Study

Key Takeaways for Board Members

The Board’s Top Responsibility

The most fundamental duty of a Board of Trustees is to ensure the long-term success and sustainability of the organization. This responsibility extends beyond fiduciary oversight and strategic planning—it includes ensuring that the right leadership is in place to drive the organization forward.

 “The board’s role in CEO oversight is not just about hiring the right leader but ensuring that leader has the support, accountability, and direction to thrive.” — Ram Charan, Corporate Governance Expert and Author

Common Pitfalls in CEO Evaluations

Many Boards struggle with CEO evaluations due to common pitfalls, including:

  • Hesitancy to embrace their leadership role in the organization:  The CEO works for the Board and being accountable for this leadership role is critical to organizational success.
  • Lack of clear success metrics: Without well-defined performance criteria, evaluations become subjective and ineffective.
  • Over-reliance on CEO self-evaluation:  Failure to engage in a meaningful way throughout the year creates an over reliance on CEO self-evaluation and feedback when evaluation time comes around.  Strong Boards are involved in the right conversations with the CEO throughout the year and have a clear understanding of strategic drivers and key metrics. 
  • Lack of Board Confidence or Expertise: Many Board members feel unqualified to assess the CEO’s performance, leading to hesitancy in providing meaningful feedback.
  • CEOs Dismissing Board Input: Without a strong evaluation process, some CEOs perceive Boards as disconnected from day-to-day operations and, therefore, not credible evaluators of performance.
  • Infrequent or Superficial Assessments: Annual reviews that lack depth or rely on outdated information do little to provide real value.

A study by the Harvard Business Review found that over 60% of CEOs believe their Boards do not provide them with helpful performance feedback.

What High-Performing Boards Do Differently

Successful Boards recognize that CEO evaluations are a strategic imperative. They:

  • Define Success Clearly: Establish measurable goals and performance indicators aligned with the organization’s mission and strategic priorities.
  • Engage in Ongoing Dialogue: Regularly discuss CEO performance, rather than limiting feedback to an annual review.
  • Gather Comprehensive Data: Use multiple sources of information, including financial performance, stakeholder feedback, and leadership effectiveness assessments.
  • Provide Constructive and Actionable Feedback: Ensure feedback is specific, balanced, and forward-looking, helping the CEO improve rather than just critique past performance.
  • Foster a Culture of Trust and Accountability: Encourage open communication between the CEO and the Board, reinforcing alignment on expectations and strategy.

Benefits to the Board

When a Board invests in a rigorous CEO evaluation process, it gains:

  • Clarity on Organizational Leadership: Confidence that the CEO is effectively steering the organization toward success.
  • Improved Decision-Making: Access to consistent and meaningful performance data to guide governance and strategy.
  • Stronger Relationship with the CEO: A collaborative approach that enhances Board-CEO trust and alignment.
  • Justification for Compensation Actions: Ensuring pay aligns with performance, providing transparency for stakeholders.
  • More effective Board governance.  Consistent focus on what really matters.

Benefits to the CEO

A well-structured CEO evaluation process provides:

  • Clear Expectations: The CEO understands what success looks like and how performance is measured.
  • Valuable Feedback: Insights from Board members help the CEO refine leadership strategies and improve effectiveness.
  • Reduced Uncertainty and Conflict: Alignment between Board and CEO minimizes the risk of misunderstandings or unexpected performance concerns.

If your Board is ready to strengthen its CEO oversight and build a high-performing leadership partnership, Catapult can help.

Let’s talk.

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