EY’s “How board committee responsibilities and structures are changing” provides much sought-after benchmarking data on S&P 500 board committee structures and remits based on 2024 proxy statement disclosures and trend data since 2021 (and earlier in certain cases).
Board committee structure
Three-quarters of companies have at least one standing board committee in addition to the three key committees. This bar chart shows the prevalence of additional board committees:
The percentage of boards with a standalone technology committee (often including technology strategy and cybersecurity oversight, and most prevalent in financial services companies) and a standalone sustainability committee (most prevalent in materials sector companies) increased from 11% and 10%, respectively in 2021, to 13% and 12%, respectively in 2024, surpassing risk committees, which have remained flat at 11% since 2021.
Page 12 of the report portrays the prevalence of additional standing committees (beyond the three key committees) by sector.
Board committee remits
Audit committee—Most notably, audit committee responsibility for cybersecurity continues to rise, having increased from 25% of the S&P 500 in 2019 to 77% in 2024.
Compensation committee—Compensation committee responsibilities have continued to expand well beyond the traditional executive compensation focus to encompass various broader workforce-related areas, as shown here:
Furthermore, from 2021 to 2024, 27% of compensation committees changed their name to reflect an expanded remit (e.g., “human capital,” “talent,” “human resources”). (See, e.g., our report: “Compensation Committee Increasingly Taking on Human Capital.”)
Nominating/governance committee—As has been widely documented, nominating/governance committee responsibilities are commonly being expanded to include primary oversight for sustainability-related matters.
However, EY notes that it is frequently observing an integrated approach whereby each standing committee is responsible for oversight of areas of ESG within its purview.
The report includes an instructive discussion of considerations relevant to reviewing the board committee structure and responsibilities for potential changes to keep pace with evolving circumstances.
Access additional resources on our Board Committees page.
This post first appeared in the weekly Society Alert!