Blogs

Shearman & Sterling's recently-released and always highly-anticipated report on its annual Corporate Governance & Executive Compensation survey contains an abundance of benchmarking data for the 100 largest US public companies, as well as a focused review of a number of hot topics - including shareholder engagement and activism, board/director evaluations, Rule 14a-8 reform, and IPO governance.

The report's deep dive on board/director evaluations is particularly share-worthy for its discussion of the range of potential evaluation design characteristics that companies inevitably must contend with (whether affirmatively, or by default) and - relatedly - the mix of design attributes typically associated with more or less robust processes, as well as the specific benchmarking data.

Key benchmarking results include:

• 58 companies made detailed disclosures about their director self-evaluation process in their 2017 proxy statements; 92 companies mentioned the process.
• Of the 92 companies that mentioned the process, disclosure was most commonly made in the description of the Nom/Gov Committee's responsibilities (77 companies) and proxy statement summary (52 companies). Many companies made disclosure in multiple sections of their proxy.
• 19 companies disclosed that they retained a 3rd-party facilitator in 2017.
• 30 companies disclosed that individual director interviews were conducted.
• 21 companies disclosed that individual director evaluations were conducted.
• 39 companies disclosed the topics discussed during the self-evaluation process.
• 36 companies disclosed the actions considered by the board as a result of the evaluation. (See examples of the actions that were considered on pg. 15.)