The usefulness of board self-assessment for nomination committees

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Abstract

This study examined whether nomination committee (NC) members find board self-assessment useful for assessing board composition and identifying candidates for board director positions. A questionnaire was administered to members of NCs in registered companies in Iceland, where responses were received from 33 participants. In designing the questionnaire, a research model (technology acceptance model, TAM) was used to measure the usefulness of information obtained from a board self-assessment. The results of linear regression show that the more positive the perception of the usefulness of information obtained from board self-assessment and the more positive the attitude towards the use of board self-assessment, the more likely it is that NCs will use the information obtained from it. The findings reveal that Icelandic NC members perceive information from board self-assessment to ease the process of selecting board directors and believe that self-assessment provides boards with valuable and reliable information, particularly in evaluating the necessity for changes within the board. This indicates that the utility of board self-assessment is substantial and beneficial for NC operations. The authors could not find published research that discusses or examines how members of NCs perceive the usefulness of board evaluation or board self-assessment. Therefore, comparing the study’s results with prior research was impossible. The data is limited to registered companies in Iceland. The study advances the theoretical understanding of the usefulness of board self-assessment for NCs. The research illuminates the value of board self-assessment for NCs by enhancing academic understanding of the usefulness of board self-evaluation as a tool for the board NC.

Keywords: Corporate Governance, Board of Directors, Board Evaluation, Board Self-Assessment, Nomination Committee

Authors’ individual contributions: Conceptualization — A.A.A.; Methodology — A.S.T. and A.A.A.; Investigation — A.S.T., A.A.A., and T.O.S.; Resources — A.S.T., A.A.A., and T.O.S.; Writing — A.S.T.; Supervision — A.A.A.; Project Administration — T.O.S.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: M1, M4, M37

Received: 15.03.2024
Accepted: 18.11.2024
Published online: 21.11.2024

How to cite this paper: Thorarinsdottir, A. S., Arnardottir, A. A., & Sigurjónsson, T. O. (2024). The usefulness of board self-assessment for nomination committees. Corporate Board: Role, Duties and Composition, 20(3), 105–114. https://doi.org/10.22495/cbv20i3art10