Boards, investors, regulators, public policy makers and others are increasingly focused on the mix of directors in the boardroom - with a particular focus on diversity, including gender, race, ethnicity, generation/age and thought, and refreshment mechanisms and processes.
The recently-released 2016 Board Practices Report, a collaborative board practices benchmarking effort between Deloitte LLP's Center for Board Effectiveness and the Society, revealed that:
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- 64% of respondents' boards added a new director in the past year, up from 50% responding to a similar question in the 2014 Board Practices Report. Board composition changes were triggered primarily by existing director resignations and age limit-related retirements, although 22% attributed the changes to orderly/planned succession to keep the board fresh, and 15% reported it was to achieve greater diversity.
- 78% of respondents' boards have some form of a refreshment policy; of those, 75% have age limits, and 5% have term limits.
- Large-cap companies have the greatest amount of gender diversity, with 40% of respondent companies having three female directors and 16% with four or more. Approximately 70% of respondents, overall, reported having at least two women on the board.
- 52% of respondents have one or two board members of a racial and/or ethnic minority.
- More boards are adding younger directors: 40% have directors between the ages of 41 - 50, compared to 36% in 2014.
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The iconic Board Practices Report - which presents findings from a survey distributed to the Society's public company members in late 2016 - covers trends in over 15 areas of board practices and hot topics including cyber risk, shareholder activism, and board diversity.
Watch for our report in tomorrow's Society Alert on the makeup of the director group newly elected to the Fortune 100 in 2016 as compared with the Russell 3000, and see this prior post: "New Director Attributes: What's Hot (& What's Not)" and these prior Society Alert reports: "Board Skills Matrices: Disclosure Trends" and "S&P 500 Board/Director Age Diversity Benchmarking" (in Company Information & Resources).
Access numerous additional resources on our Board Composition and Board Refreshment topical pages.