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The IRRCi's (Investor Responsibility Research Center Institute) new report on Microcap Board Governance provides a wealth of benchmarking data on core governance practices for <$300 million market cap companies based on its study of a random sampling of 160 (10% of all) microcaps, with a median market cap of $80.7 million, and 36% of which may be described as nanocap (<$50 million market cap).

Among the noteworthy findings:

Company Profile

• 73% are Nasdaq-listed; just 8% are NYSE-listed. The remaining 19% trade on the NYSE American exchange. This compares to a nearly evenly split between the NYSE and Nasdaq, with relatively few trading on the NYSE American exchange, for the Russell 3000 (R3000).
• 53% of the companies are SRCs and 21% qualify as EGCs - both of which categories qualify for certain reduced or scaled disclosures.
• 32% of the companies have been public for 10 - 20 years. Just 22% have been public for less than five years.
• Executives and directors own at least 10% of the company's stock at 56% of the microcap companies vs. just 28% of R3000 companies, but only 4% of the microcaps are controlled companies.
• 12% of R3000 companies have multiple classes of stock, compared to only 7% of the microcaps.

Board Composition

• The average board size of the microcap companies is 6.9 directors, compared to 8.9 directors for the R3000. 22% of the microcaps have fewer than six directors.
• Only 8% of the microcap directors are women compared to 16% of R3000 directors. 61% of the microcap companies vs. 21% of R3000 boards have no female directors.
• Director ages and tenure for microcaps and the Russell 3000 are comparable.
• 83% of the microcap directors don't currently serve on other public company boards compared to 65% of R3000 directors.

Board/Governance Practices

• 62% of the microcaps separate the CEO/Chair roles, which is comparable to the R3000. However, among those microcaps that have combined the CEO/Chair roles, 70% don't have an independent lead director. Among those microcaps with separate CEO/Chair roles, 63% have an independent board leader - but 37% don't, and 8% don't even have a board chair role.
• 71% of microcap boards have three committees - typically Audit, Compensation, and Nom/Gov, n/w/s the fact that Nasdaq-traded companies aren't required to have standing nominating committees (although nearly all do so).
• Only one company had a shareholder proposal in its 2017 proxy statement (re: proxy access).
• Microcap directors are more likely to receive board meeting attendance fees: 32% vs. just 22% for the R3000. However, committee meeting fees are less common among the microcaps (22%) when compared to the R3000 (24%).