Posts Tagged ‘Board composition’

Women on US Boards: What Are We Seeing?

Posted by Yaron Nili, Co-editor, HLS Forum on Corporate Governance and Financial Regulation, on Wednesday March 4, 2015 at 9:02 am
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Editor’s Note: The following post comes to us from Ernst & Young LLP, and is based on a publication by the EY Center for Board Matters.

Despite the value of bringing more women onto corporate boards being increasingly recognized, US companies continue a slow march toward gender diversity. While progress is being made, it is not at the pace needed to compete with public sector approaches being taken in other markets.

This post looks at diversity in US boardrooms at the time of their 2014 annual meetings and, unless otherwise noted, reflects S&P 1500 companies. It is based on the EY Center for Board Matters’ proprietary corporate governance database. It is also part of the Center’s ongoing board diversity series and follows Diversity drives diversity: From the boardroom to the C-suite (2013) and Getting on board: Women join boards at higher rates, though progress comes slowly (2012). For EY’s global perspective, see Women on boards: global approaches to advancing diversity (2014) and Women. Fast forward (2015).

…continue reading: Women on US Boards: What Are We Seeing?

Beyond Term Limits: Using Performance Management to Guide Board Renewal

Posted by Kobi Kastiel, Co-editor, HLS Forum on Corporate Governance and Financial Regulation, on Friday February 13, 2015 at 9:00 am
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Editor’s Note: The following post comes to us from Stan Magidson, President and CEO of the Institute of Corporate Directors and Chair of the Global Network of Directors Institutes. This post is based on portions of an ICD publication titled Beyond Term Limits: Using Performance Management to Guide Board Renewal; the complete survey is available here.

The debate over board renewal is moving into sharper focus in Canada. New public company disclosure requirements demand greater transparency on such things as term limits and other renewal mechanisms, and some large investors are sending the implicit message that companies must renew the board or they will seek to do it instead. The ICD agrees that the composition and renewal of the board are vital processes that demand rigour and analysis and are best undertaken by the board pro-actively.

In the paper Beyond Term Limits: Using Performance Management to Guide Board Renewal we seek to provide a framework for boards to build a renewal process that increases accountability and achieves the right mix of skills and experience to create long-term effectiveness.

…continue reading: Beyond Term Limits: Using Performance Management to Guide Board Renewal

Gender Diversity at Silicon Valley Public Companies 2014

Posted by Yaron Nili, Co-editor, HLS Forum on Corporate Governance and Financial Regulation, on Monday January 26, 2015 at 9:14 am
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Editor’s Note: The following post comes to us from David A. Bell and Shulamite Shen White, partner and senior associate in the corporate and securities group at Fenwick & West LLP. This post is based on portions of a Fenwick publication titled Gender Diversity in Silicon Valley: A Comparison of Large Public Companies and Silicon Valley Companies (2014 Proxy Season); the complete survey is available here.

Fenwick & West has released its annual study about gender diversity on boards and executive management teams of companies in the technology and life science companies included in the Silicon Valley 150 Index and very large public companies included in the Standard & Poor’s 100 Index. [1] The Fenwick Gender Diversity Survey uses almost twenty years of data to provide a better picture of how women are participating at the most senior levels of public companies in Silicon Valley.

This year’s survey also introduces the Fenwick Gender Diversity Score™, a metric for assessing gender diversity overall within each of the indices. This composite score is based on data at the board and executive management level in the SV 150, top 15 companies of the SV 150 by revenue, and the S&P 100 over the nineteen years surveyed and in a set of categories selected as representative of the overall gender diversity picture.

…continue reading: Gender Diversity at Silicon Valley Public Companies 2014

Director Tenure: A Solution in Search of a Problem

Posted by Yaron Nili, Co-editor, HLS Forum on Corporate Governance and Financial Regulation, on Friday January 23, 2015 at 9:02 am
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Editor’s Note: The following post comes to us from Scott C. Herlihy, partner in the Corporate Department at Latham & Watkins LLP, and is based on an article by Mr. Herlihy, Steven B. Stokdyk, and Joel H. Trotter that originally appeared in NACD’s Directorship magazine.

Director tenure continues to gain attention in corporate governance as term limits become a cause célèbre. Proponents argue directors should no longer qualify as independent after 10 years of service, even though no law, rule or regulation prescribes a maximum term for directors.

We believe director term limits would be misguided and counterproductive. Institutional Shareholder Services (ISS) has increased its focus on the issue. ISS’ governance rating system, QuickScore, views tenure of more than nine years as an “excessive” length that potentially compromises director independence. ISS’ more moderate proxy voting guidelines, while opposing proposals for director term limits and mandatory retirement ages, indicates that ISS will “scrutinize” boards whose average tenure exceeds 15 years.

…continue reading: Director Tenure: A Solution in Search of a Problem

Diversity on Corporate Boards: How Much Difference Does “Difference” Make?

Posted by June Rhee, Co-editor, HLS Forum on Corporate Governance and Financial Regulation, on Monday January 5, 2015 at 2:05 pm
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Editor’s Note: The following post comes to us from Deborah L. Rhode, the Ernest W. McFarland Professor of Law and Director of the Center on the Legal Profession at Stanford University, and Amanda K. Packel, the Deputy Director of the Arthur and Toni Rembe Rock Center for Corporate Governance, a joint initiative of Stanford Law School and the Stanford Graduate School of Business.

In recent years, increasing attention has focused on the influence of gender and racial diversity on boards of directors. More than a dozen countries now require some form of quotas to increase women’s representation on boards, and many more have voluntary quotas in corporate governance codes. In the United States, support for diversity has grown in principle, but progress has lagged in practice, and controversy has centered on whether and why diversity matters.

In our article, Diversity on Corporate Boards: How Much Difference Does “Difference” Make?, which was recently published in Delaware Journal of Corporate Law, 39, no. 2, Fall 2014, we evaluate the case for diversity on corporate boards of directors in light of competing research findings. An overview of recent studies reveals that the relationship between diversity and financial performance has not been convincingly established. There is, however, some theoretical and empirical basis for believing that when diversity is well managed, it can improve decision-making and enhance a corporation’s public image by conveying commitments to equal opportunity and inclusion. We believe increasing diversity should be a social priority, but not for the reasons often assumed. The “business case for diversity” is less compelling than other reasons rooted in social justice, equal opportunity, and corporate reputation. Our article explores the rationale for diversity and strategies designed to address it.

…continue reading: Diversity on Corporate Boards: How Much Difference Does “Difference” Make?

Corporate Governance Survey—2014 Proxy Season Results

Posted by Yaron Nili, Co-editor, HLS Forum on Corporate Governance and Financial Regulation, on Wednesday December 31, 2014 at 9:12 am
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Editor’s Note: The following post comes to us from David A. Bell, partner in the corporate and securities group at Fenwick & West LLP. This post is based on portions of a Fenwick publication titled Corporate Governance Practices and Trends: A Comparison of Large Public Companies and Silicon Valley Companies (2014 Proxy Season); the complete survey is available here.

Since 2003, Fenwick has collected a unique body of information on the corporate governance practices of publicly traded companies that is useful for Silicon Valley companies and publicly-traded technology and life science companies across the U.S. as well as public companies and their advisors generally. Fenwick’s annual survey covers a variety of corporate governance practices and data for the companies included in the Standard & Poor’s 100 Index (S&P 100) and the high technology and life science companies included in the Silicon Valley 150 Index (SV 150). [1]

…continue reading: Corporate Governance Survey—2014 Proxy Season Results

Top 10 Topics for Directors in 2015

Posted by Yaron Nili, Co-editor, HLS Forum on Corporate Governance and Financial Regulation, on Wednesday December 24, 2014 at 9:08 am
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Editor’s Note: The following post comes to us from Kerry E. Berchem, partner and co-head of the corporate practice group at Akin Gump Strauss Hauer & Feld LLP. This post is based on an Akin Gump corporate alert; the full publication, including footnotes, is available here.

U.S. public companies face a host of challenges as they enter 2015. Here is our list of hot topics for the boardroom in the coming year:

  • 1. Oversee strategic planning in the face of uneven economic growth and rising geopolitical tensions
  • 2. Oversee cybersecurity as hackers seek to infiltrate even the most sophisticated information security systems
  • 3. Assess the impact of advances in technology and big data on the company’s business plans
  • 4. Cultivate shareholder relations and assess company vulnerabilities as activist investors target more companies
  • 5. Consider the impact of M&A opportunities
  • 6. Oversee risk management as newer and more complex risks emerge
  • 7. Ensure appropriate board composition in light of increasing focus on diversity, director tenure and board size
  • 8. Explore new trends in reducing corporate health care costs
  • 9. Set appropriate executive compensation
  • 10. Ensure the company has a robust compliance program as the SEC steps up its enforcement efforts and whistleblowers earn huge bounties.

…continue reading: Top 10 Topics for Directors in 2015

Some Thoughts for Boards of Directors in 2015

Editor’s Note: Martin Lipton is a founding partner of Wachtell, Lipton, Rosen & Katz, specializing in mergers and acquisitions and matters affecting corporate policy and strategy. This post is based on a Wachtell Lipton memorandum by Mr. Lipton, Stephen A. Rosenblum, and Karessa L. Cain.

The challenges that directors of public companies face in carrying out their duties continue to grow. The end goal remains the same, to oversee the successful, profitable and sustainable operations of their companies. But the pressures that confront directors, from activism and short-termism, to ongoing shifts in governance, to global risks and competition, are many. A few weeks ago we issued an updated list of key issues that boards will be expected to deal with in the coming year (accessible at this link: The Spotlight on Boards, and discussed on the Forum here). Highlighted below are a few of the more significant issues and trends that we believe directors should bear in mind as they consider their companies’ priorities and objectives and seek to meet their companies’ goals.

…continue reading: Some Thoughts for Boards of Directors in 2015

2014 Annual Corporate Directors Survey

Editor’s Note: Mary Ann Cloyd is leader of the Center for Board Governance at PricewaterhouseCoopers LLP. The following post is based on the executive summary of PwC’s Annual Corporate Directors Survey; the complete publication is available here.

Over the last several years, we’ve observed certain trends that are shaping corporate governance and which we believe will impact the board of the future. We structured our 2014 Annual Corporate Directors Survey to get directors’ views on these trends and other topics including:

…continue reading: 2014 Annual Corporate Directors Survey

Challenging Boardroom Homogeneity: Corporate Law, Governance, and Diversity

Posted by June Rhee, Co-editor, HLS Forum on Corporate Governance and Financial Regulation, on Thursday October 2, 2014 at 9:05 am
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Editor’s Note: The following post comes to us from Aaron A. Dhir, an Associate Professor of Law at Osgoode Hall Law School in Toronto, Canada and a Visiting Professor of Law at Yale Law School.

The lack of gender parity in the governance of business corporations has ignited a heated global debate, leading policymakers to wrestle with difficult questions that lie at the intersection of market activity and social identity politics. In my new book, Challenging Boardroom Homogeneity: Corporate Law, Governance, and Diversity (Cambridge University Press, forthcoming in 2015), I draw on semi-structured interviews with corporate board directors in Norway and documentary content analysis of corporate securities filings in the United States to investigate empirically two distinct regulatory models designed to address diversity in the boardroom—quotas and disclosure.

…continue reading: Challenging Boardroom Homogeneity: Corporate Law, Governance, and Diversity

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