Corporate Governance Function

• At the vast majority of companies (76%), the Chief Governance Officer role is combined with another role, while 24% of companies have it as a stand-alone position. 
• The Chief Governance Officer role is most often combined with the Chief Legal Officer (CLO) or General Counsel role (51%).
• The structure of the Chief Governance Officer role varies by company type and public company size:
  • Nonprofit or not-for-profit organizations are significantly more likely to have a stand-alone role (43%) compared to public companies (23%) and private companies (19%).
  • Among public companies, large-caps are more likely to have a stand-alone role (31%) than mid-caps (13%) and small-caps (21%).

• The Chief Governance Officer most commonly reports to the CEO (60%), followed by the CLO or General Counsel (37%).
• Among public companies, the reporting structure for the Chief Governance Officer varies significantly by company size:
  
  • The Chief Governance Officer is much more likely to report to the CEO at small-caps (84%) and mid-caps (70%) compared to large-caps (41%).
  • Conversely, it is more common for the Chief Governance Officer to report to the CLO or General Counsel at large-caps (55%) than at small-caps (12%) and mid-caps (26%).
• The differences between public and private companies and nonprofit organizations are less pronounced. 

• At nearly 40% of companies, the Chief Governance Officer holds a C-suite position, followed by the position of Senior Vice President (19%) and Vice President (18%). 
• The level of the Chief Governance Officer role varies by company type and public company size:
  
  • The Chief Governance Officer is at the C-suite level in 38% of public companies and 36% of nonprofit organizations, but only 24% of private companies. At private companies, the Chief Governance Officer is more likely to be a Senior Vice President (32%), compared to 18% of public companies and 7% of nonprofit organizations. 
  • Among public companies, the Chief Governance Officer is at the C-suite level in 53% of small-caps, 45% of mid-caps, and 29% of large-caps. Conversely, the Chief Governance Officer holds a Senior Vice President position at 22% of large-caps, 16% of mid-caps, and 9% of small-caps.

• At most companies (84%), the Chief Governance Officer is part of the legal department or the General Counsel’s office. This is particularly the case at public companies (89%) and private companies (64%). However, this is less common (43%) at nonprofit organizations, where the Chief Governance Officer’s function is typically its own department (57%).

• The Chief Governance Officer department/function most commonly has lead responsibility within the organization for board, committee, and director evaluations (85%), shares joint responsibility for shareholder and stakeholder engagement (65%), and has no lead or joint responsibility for managing IRS filings and other charitable organization submissions (63%).
• Even when excluding responsibilities unique to public companies, the Chief Governance Officer’s responsibilities vary widely depending on company type and size.

• For public companies, the Chief Governance Officer’s most time-consuming responsibility is drafting the annual proxy statement. Excluding responsibilities unique to public companies, preparing materials for board and committee meetings consistently ranks as the top time-intensive task for all organizations.

• A consistent trend across all organizations is that board and board committee materials are predominantly handled internally (96%).
• While executive compensation is outsourced in part by almost a majority of companies (46%), practices vary by company type and public company size:
  
  • Private companies are more likely to handle executive compensation internally (59%) compared to public companies (40%) and nonprofit organizations (21%). 
  • Likewise, large-caps are more likely to handle executive compensation internally (48%) compared to small-caps (37%) and mid-caps (29%). 

• At most companies, the person serving in the role of Corporate Secretary (who may also be the Chief Governance Officer) serves as secretary of the board (80%) and key board committees (audit committee: 51%; compensation committee: 56%; nom/gov committee: 65%).
• However, practices vary by company type and public company size, especially with respect to who serves as secretary of key board committees, such as the audit committee. 

Note: When respondents indicated their corporate secretary and general counsel roles are combined, they generally selected both the corporate secretary and general counsel options, as reflected in the chart below. In cases where the roles are not combined, respondents overwhelmingly chose the corporate secretary option.

• At virtually all companies, the Chief Governance Officer or a direct report(s) regularly reviews all committee materials (72%) or certain materials (25%) prior to distribution. 

• Including the Chief Governance Officer, an equal percentage of companies (38%) have either one to three or four to six full-time employees (FTEs) responsible for governance. However, this number varies significantly by company type and public company size.
  
  • Half of nonprofit organizations report having between one and three FTEs dedicated to governance, while the other half have between four and six FTEs.  
  • The vast majority of private companies (71%) have between one and three FTEs. 
  • Public companies show a wider range, with about 35% having one to three FTEs, nearly 40% having four to six, and 27% having more than six. 
• Among public companies, large-caps tend to have more employees carrying out governance responsibilities than their smaller counterparts. The majority of small-caps (67%) have between one and three FTEs, while most mid-caps (55%) and large-caps (84%) have more than three FTEs.

• At a majority of companies (62%), the Chief Governance Officer has between one and five U.S.-based direct reports. Additionally, 71% of companies report that the Chief Governance Officer has no direct or indirect reports based outside of the U.S.
• The number of direct and indirect reports varies by company type and size, with public companies having more reports outside the U.S. compared to private companies and nonprofit organizations. Similarly, large-caps tend to have more reports outside the U.S. than their smaller counterparts.

• The vast majority of companies report having one Corporate Secretary (84%), CLO or General Counsel (76%), and Head of Investor Relations (60%). 
• Titles and numbers of employees who perform roles for the governance function vary substantially by company type and size. 

• Retaining outside counsel is common across all company types and sizes (98%).
• The types of service providers regularly or periodically retained to assist the corporate governance function vary significantly by company type and public company size: 
  
  • Nonprofit organizations are more likely than both public companies and private companies to hire a corporate governance consultant, but less likely to engage a director search firm.
  • Large-caps are more likely than mid-caps, and significantly more likely than small-caps, to retain a director search firm.

• Purchasing or retaining a board portal is common across all company types and sizes (98%).
• The types of online or electronic services, software, or platforms used in-house to assist the corporate governance function vary significantly by company type and public company size: 
  
  • Public companies are significantly more likely than private companies and nonprofit organizations to purchase D&O questionnaires services or platforms, whereas nonprofits are more likely to develop those capabilities in-house.
  • Small-caps are more likely to develop D&O questionnaires and entity management services or platforms in-house, whereas mid and large-caps are more likely to purchase such platforms and services.