Corporate Secretary’s “Board Refreshment: Finding the right directors to move forward” (sponsored by Computershare) reveals benchmarking data on board refreshment oversight, candidate identification and selection, investor interest, and disclosure, based on the results of a recent survey of 211 governance professionals worldwide (50% North America) across public companies (44% mega- and large cap | 25% mid-cap | 24% small-cap).
North America-specific findings (except as otherwise indicated) include:
Board oversight—The vast majority of boards both in the US and globally task the Nominating & Governance Committee with primary oversight of board refreshment (77% US and 71% globally).
Corporate secretary role—Beyond the board itself, the Corporate Secretary/General Counsel is the most common human resource used by the board to assist in its refreshment efforts (79% both North America and globally). A majority of respondents (67% North America | 63% globally) also look to outside advisers for assistance.
Frequency on the agenda—A majority of Nom/Gov Committees with primary oversight report to the full board on board refreshment either on an ad hoc basis (38%) or annually (33%). A plurality of boards (45%) discuss these issues on an ad hoc basis; 29% of full boards discuss the issues annually.
Candidate identification—Personal connections are the most common source of identifying potential director candidates (81%); however, two-thirds of respondents report using executive search firms and more than one-quarter look to industry groups.
Selection criteria—Gender, race/ethnicity, and relevant industry experience (other than the company’s industry) are the most common considerations when recruiting new directors, at 89%, 86%, and 83%, respectively.
Pipeline—A majority of US respondents indicated that their board has a pipeline of potential director candidates, generally consistent with the global average.
Investor interest—A plurality of respondents said that investors occasionally ask about the company’s board refreshment, while 25% said investors never ask about it. (Editor’s note: Depending on the content of the company’s public disclosure, the fact that investors don’t ask about it may not signify a lack of interest; rather, it may indicate good disclosure).
Proxy disclosure—The vast majority of respondents included information regarding board/director gender, skills, age, and race/ethnicity (listed in order of descending prevalence) in their most recent proxy statement. In contrast, a minority of companies in North America and worldwide include information regarding directors’ sexual orientation or veteran status, although North America leads other geographic regions in sexual orientation disclosure at 22%.
The report also includes results by market cap.