EY's annual review of Fortune 100 company proxy statements revealed these board evaluation and board evaluation disclosure practices in 2019, and changes in practices year-over-year:
- Disclosure: 93% of companies provided some disclosure about their board evaluation process.
- Process: 73% disclosed that their Nom/Gov Committee conducted the process either alone or with the independent lead director or chair; 27% disclosed using an independent facilitator at least periodically - typically every two or three years, compared to 22% in 2018.
- Scope: Approximately 40% (up from 25% last year) disclosed that they included individual director self-evaluations along with board and committee evaluations; 25% (compared to 10% in 2018) disclosed conducting peer evaluations.
- Coverage: Nearly half (up from 40% last year) disclosed the general topics covered by the evaluation.
- Method: 15% disclosed use of questionnnaires only; 13% disclosed use of interviews only; and about 30% disclosed use of both questionnaires and interviews.
- Action Plan: About 25% (up from 20% in 2018) provided high-level disclosure of actions taken as a result of their board evaluation.
In addition to helpful benchmarking data, the report includes a list of questions for boards to consider to facilitate their evaluation of their current practices.
Access additional information & resources on our Board/Director Evaluations page. This post first appeared in the weekly Society Alert!