“Board Leadership and Structure” from The Conference Board provides insights on board leadership (dual/separate CEO/board chair roles, specifically); board and committee meeting frequency; board committee structure; and select committee responsibilities, among the S&P 500 and Russell 3000 (R3000) companies based on a wealth of benchmarking data from publicly available sources as of August 15, 2023, and associated insights from a recent discussion with leading in-house corporate governance professionals.
Among the key takeaways:
Combined/separate CEO/chair - Larger companies remain much more likely to combine the CEO/board chair roles than smaller companies. While the proportion of independent chairs has changed very little over the past five years for each of the S&P 500 and the R3000, R3000 companies that have separated the roles are much more likely to have independent chairs (36% v. nearly 45%) and the gap between larger and smaller companies is even more significant (59% for companies under $100 million v. 33% for companies $50 billion+).
Number of board & committee meetings - The number of board meetings has declined to less than pre-pandemic levels to an average of 7.5 meetings for both S&P 500 and R3000 companies. The report indicates that the decline in the face of increasing board responsibilities may be attributable to (among other factors) companies more commonly supplementing regular board meetings with informal conference calls and ongoing portal communications. If so, companies are advised to disclose this development/practice to head off potential investor concerns.
The average number of committee meetings has remain largely unchanged over the past five years (~5.4 for S&P 500 and ~4.9 for R3000) but for a pandemic spike in 2020, with audit committees maintaining the lead in terms of the number of meetings annually for both company groups.
Committee structure - Larger companies are more likely to have four or more standing committees as compared to smaller companies, which most commonly have three. Committee structures are highly correlated with overall board size and, presumably in certain cases (e.g., Risk Committee), industry sector. Executive committees remain the most prevalent standing committee for both the S&P 500 and R3000 after the three key committees.
ESG oversight – Nearly all S&P 500 companies and 84% of R3000 companies have publicly disclosed allocation of ESG oversight to the board and/or committees. Additional detail is provided below.