Further to Spencer Stuart’s “2023 S&P 500 New Director and Diversity Snapshot” (which we reported on here (see “S&P 500”)), among the share-worthy takeaways from Spencer Stuart’s iconic annual S&P 500 Board Index are these:
Board refreshment practices
- Mandatory retirement—69% of boards have a mandatory retirement age, most commonly 75 and older.
- Term—Just 8% of boards (39 companies) have term limits, most commonly 15 years or more.
- Tenure—The average tenure of an independent director is 7.8 years.
- Mandatory resignations—88% of boards require directors to offer their resignation upon a change in employment status or job responsibilities. Acceptance of the resignation is typically subject to the Nominating Committee Chair’s discretion.
Standing committees
Always a topic of keen interest, here is the breakdown on board committee structures in 2023 as compared to 2022 and five and 10 years ago:
Notably, 70% of boards have more than the three key standing committees, with an average of 4.2 standing committees.
Board evaluation practices
Among boards reporting some form of evaluation (98%):
- 47% reported evaluating the full board, board committees, and individual directors; 48% reported evaluating the full board and committees; 5% reported evaluating the full board only; and 1% reported evaluating the full board and directors.
- 25% of boards (on par with last year) disclosed engagement of a third-party facilitator.
- Nearly 70% of companies included a director skills matrix in their proxy statements (compared to 56% in 2022, 45% in 2021, and 38% in 2020).
See Spencer Stuart’s webpage, which provides access to highlights, industry sector comparisons, and benchmarking results by topic.
Access additional information & resources on our Board Practices/Governance Practices page.