Among the share-worthy takeaways from Spencer Stuart’s always eagerly awaited S&P 500 Board Index are these:
New independent directors
- Demographics - 413 new independent directors were added over the past year to the 494 boards included in the 2020 index. Of those new directors, 59% are diverse (women and minority men); 47% are women; 28% are first-time directors; and 18% are “next-gen” (50 and younger).
- Women – Women represent 28% of all directors on these boards. Notably, 76 boards (28% of boards that appointed new independent directors during the 2020 proxy year) increased their size over the past year to add a female director (on a net basis after independent director departures).
- Industry backgrounds – Technology was the most sought-after experience for new independent directors over the past year at 24% of the total, followed by consumer goods at 14% and financial services at 10%.
Board refreshment practices
- 70% of boards have a mandatory retirement age.
- 77% of independent directors who left their boards over the past year served on boards with mandatory retirement ages. The majority of those departing directors had reached or exceeded the age limit; an additional 14% departed within three years of the board's age limit.
Standing committees
Always a keen topic of interest, here is the breakdown on board committee structures in 2020 as compared to 2015:
Board evaluation practices
Among boards reporting some form of evaluation (98%):
- 42% reported evaluating the full board, board committees, and individual directors - compared to just 17% in 2009. Conversely, the percent of boards reporting a board-only evaluation has declined from 28% in 2009 to just 7% in 2020.
- 44% of boards — up from 29% 10 years ago — reported conducting some form of individual director evaluations.
- 21% of boards disclosed they engaged an independent third-party governance expert to facilitate the evaluation process, versus 13% last year. A number of these boards indicate that they use an outside facilitator “periodically” or every two or three years.
See Spencer Stuart's selected Highlights and detailed data on board composition, independent directors, board leadership, board organization & process, and board committees for nine industry sectors, and additional information & resources on our Board Practices/Governance Practices page. This post first appeared in the weekly Society Alert!