"Private Company Board Compensation and Governance" from Compensation Advisory Partners and Family Business and Private Company Director magazines reveals select benchmarking data on director pay and governance practices based on a recent survey of 750 demographically diverse private companies, with 61% of respondents representing wholly family-owned or majority family-owned or controlled companies.
Key board compensation prevalence findings at the median are summarized here:
Noteworthy governance results include:
- Board size—Board sizes commonly range from five to eight directors. The median size is seven directors.
- Board composition—Boards are commonly composed of approximately 50% inside directors and 50% independent/outside directors.
- Board diversity—Board diversity is at least "somewhat important" to two-thirds of respondents, with 73% of boards including women and 29% including minority directors, and larger companies (>$500M revenue) correlating with greater board diversity.
- Board effectiveness—Respondents most commonly associated (a) adding specific expertise (e.g., industry, operations, finance) to the board and (b) increasing interactions with management, with improved board effectiveness.