Board Evaluation in Saudi Arabia

Board evaluation is one of the governance requirements companies most often treat as a box to check rather than a tool to use. Done well, it is one of the few processes that gives directors honest, structured feedback on how the board is actually functioning — not how it believes it's functioning. Here are the questions we're asked most.

What is a board evaluation, and why does it matter?

A board evaluation is a structured annual assessment of how well the board, its committees, and individual directors are performing — covering composition, process, dynamics, and strategic oversight. It matters because a board that never examines its own effectiveness has no reliable way to know whether it is actually adding value, and regulators increasingly expect to see evidence that it does.

Does Saudi regulation require board evaluations?

Yes. The CMA's Corporate Governance Regulations require listed companies to conduct an annual evaluation of the board, its committees, and individual members, and to disclose in the annual report that the evaluation took place and a summary of its outcome.

Should the evaluation be internal or led by an external party?

Best practice is a mix: most years an internally facilitated self-assessment (a structured questionnaire plus a board discussion) is sufficient, but an independently facilitated external evaluation every two to three years brings objectivity that an internal process cannot — directors are more candid with someone who has no stake in the boardroom dynamics.

What should a board evaluation actually cover?

Four areas, at minimum: board composition and skills (does the mix of expertise match what the strategy requires), process (are agendas, information, and time allocated well), dynamics (is there genuine debate, or does one voice dominate), and individual director contribution (attendance, preparation, and the value of their input).

How is an individual director's performance evaluated without it becoming personal or political?

Through a structured, confidential process — typically a written questionnaire completed by peers and the chair, sometimes followed by a one-on-one conversation — with results shared privately with the individual and the chair, not debated in open session. The goal is developmental feedback, not a public verdict.

Who evaluates the board chair?

Usually the senior independent director or, in smaller boards, a lead director coordinates peer feedback on the chair and delivers it directly and privately. The chair should not run their own evaluation process.

What happens with the results?

They should produce a short action plan — two or three concrete changes for the coming year, such as adjusting committee composition, changing how board packs are structured, or adding a specific skill set at the next director search — reviewed for progress at the following year's evaluation. An evaluation that produces no visible change becomes a paperwork exercise.

What should be disclosed publicly about the evaluation?

Enough to demonstrate the process was real: that an evaluation was conducted, who led it (internal or external), the broad areas it covered, and a general statement of outcome — without disclosing individual director assessments or anything confidential.

None of this requires a large governance function — it requires discipline: a process that runs every year, produces honest feedback, and results in something changing. Boards that treat evaluation as routine, rather than exceptional, are the ones that actually improve.