Refreshing an Underperforming Board

By Adrian Lawrence FCA, founder of NED Capital · Part of the Board Governance Hub

Boards, like the organisations they govern, can lose effectiveness over time. Directors who were once the right choice may no longer fit the challenges the business faces; a board can become too comfortable, too aligned, or too settled to provide genuine challenge; skills that mattered a decade ago may have been overtaken by needs the board cannot meet. Recognising that a board has become underperforming, and refreshing it thoughtfully, is one of the harder things a chair or a board does — because it involves honest assessment, difficult conversations, and the managed departure of directors who may have served loyally. This guide sets out how to refresh an underperforming board: how to recognise the signs, how to assess the problem, how to manage director transitions, and how to rebuild effectiveness.

It is written for chairs, boards and investors confronting board underperformance, and draws on NED Capital’s work refreshing and strengthening boards. Every search is led personally by Adrian Lawrence FCA.

Recognising an Underperforming Board

The signs of an underperforming board are often visible to those willing to see them. Discussions that lack genuine challenge, where the board defers to management or reaches consensus too easily. A skills mix that no longer matches the business’s challenges — a board strong on the issues of the past but thin on those of the present, whether digital, regulatory, or the demands of a new strategy. Directors who have served too long to retain independence or fresh perspective, or who have disengaged. A board that has become too aligned or too collegial to hold management properly to account. And, at the extreme, a board that has missed something it should have caught. Recognising these signs requires honesty, and often an external perspective, because a board that has become complacent is frequently the last to see it. Our guide to what makes a board truly independent in practice touches on several of these failings.

Use a Board Evaluation to Diagnose

The most reliable way to move from a sense that the board is underperforming to a clear understanding of why is a proper board evaluation. A rigorous evaluation — ideally externally facilitated, which brings objectivity a self-assessment cannot — examines how the board performs, where its collective skills and capability fall short, how well it challenges and holds management to account, and how effectively individual directors contribute. It turns a vague unease into a specific diagnosis: this skill is missing, this dynamic is unhealthy, this director has disengaged, this committee is not working. That diagnosis is the foundation of a thoughtful refresh, because it tells you what the board actually needs rather than leaving you to guess. Our page on board evaluations and reviews covers the process, and a board skills matrix helps map the gaps precisely.

Managing Director Transitions

Refreshing a board usually means some directors leaving, and this is the hardest part — because it involves the managed departure of people who may have served loyally and become friends. Handled badly, it creates resentment and disruption; handled well, it is a normal, respectful part of board renewal. The keys are a clear rationale grounded in the board’s needs rather than personal criticism, honest and respectful conversations led by the chair, and where possible a planned, dignified transition rather than an abrupt departure. Board tenure guidelines help by making refresh a normal expectation rather than a personal judgement — the UK Corporate Governance Code treats long tenure as relevant to independence, which gives a natural, impersonal basis for renewal. The chair carries the main responsibility for these transitions, and handling them with honesty and respect is one of the marks of a good chair.

Rebuilding Effectiveness

With a clear diagnosis and the necessary transitions managed, the refresh becomes a matter of rebuilding — appointing new directors who bring what the evaluation showed the board was missing. This is board-building applied to an existing board: appointing against the specific gaps identified, whether particular expertise, greater independence, fresh perspective, or diversity of background and thought. The new appointments should be made with the whole board in view, so they complement the directors who remain and address the dynamics the evaluation revealed, not merely the skills. A thoughtful refresh often also uses the opportunity to strengthen the board’s processes — its evaluation, its succession planning, its committee structure — so that it does not drift back into underperformance. The goal is not just to fix the current problem but to build a board that stays effective. Our guides to appointing a NED and board succession planning cover the rebuilding.

How This Differs From Building a New Board

Refreshing an existing board differs from building one from scratch in two important respects. First, it involves managing departures as well as arrivals — the human and reputational sensitivity of moving directors on, which a new build does not face. Second, it must work with the directors who remain and the dynamics already in place, appointing to complement and correct rather than to design from nothing. This makes a refresh in some ways harder than a fresh build, because it combines the difficulty of honest assessment and managed transition with the work of new appointment. But the underlying disciplines are the same: diagnose honestly, appoint against real gaps, and build with the whole board in view. Done well, a refresh restores a board’s effectiveness without the disruption of wholesale change.

Frequently Asked Questions

How do you know if a board is underperforming?

Signs include discussions that lack genuine challenge, a skills mix that no longer matches the business’s needs, directors who have served too long to stay independent or engaged, and a board too aligned to hold management to account. An external board evaluation gives an objective diagnosis.

Should we use an external board evaluation?

For diagnosing underperformance, an externally facilitated evaluation is usually worth it — it brings objectivity a self-assessment cannot, and a board that has become complacent is often the last to see its own weaknesses.

How do you move a long-serving director on respectfully?

Through a clear rationale grounded in the board’s needs rather than personal criticism, honest conversations led by the chair, and a planned, dignified transition. Board tenure guidelines help by making refresh a normal expectation rather than a personal judgement.

How many directors should change in a refresh?

It depends on the diagnosis. A refresh should address the specific gaps and dynamics the evaluation reveals, appointing to complement the directors who remain — not wholesale change for its own sake, which is disruptive, nor token change that leaves the real problems unaddressed.

NED Capital | Sister practice of FD Capital | ICAEW practising certificate held by Adrian Lawrence FCA.