Spencer Stuart U.S. Board Index

December 2017. SpencerStuart.

“Investors’ interest in boards has never been greater. Investors expect that boards will include a diverse mix of perspectives and backgrounds aligned with the company’s current and future strategic objectives and risks, and that they will embrace meaningful processes to refresh the board and maximize board effectiveness.

How are boards responding to growing investor pressure on governance? Data from the 32nd edition of the Spencer Stuart U.S. Board Index (SSBI) suggest that S&P 500 boards are evolving in several important ways, including:

·        Becoming more diverse. For the first time since we began tracking this data in 1998, just over half of the 397 new S&P 500 directors are women and/or minorities. Female representation among new directors rose to 36% (142 directors) in 2017, while minority males make up 14% or 57 of the new independent directors; 6% or 25 of the new directors are minority women.

·        Adding directors with expertise in emerging areas of importance,including technology, finance and investment management. An all-time high 45% of the incoming directors are serving on their first outside public company board.

·        Expanding the pool of potential director candidates. Only 37% of S&P 500 CEOs serve at least one public company board in addition to their own, down from 52% 10 years ago. With CEOs accepting fewer external board roles, boards increasingly are appointing executives with division, subsidiary or other leadership experience.

Yet, our research also shows that progress is slower in other areas of interest to investors. Board turnover remains low, and the percentage of companies reporting some form of individual director assessments is low and largely unchanged. Investors view peer and/or self-assessments as “best practices” for providing feedback to directors, identifying skill gaps in boardroom and facilitating boardroom succession.”

More here.


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