GMI Ratings’ 2013 Women on Boards survey includes data on 5,977 companies in 45 countries around the world. The results show that progress on most measures of female representation continues to be slow. Women now hold 11% of board seats at the world’s largest and best-known companies, up 0.5 percentage points from a year ago and a total of only 1.7 percentage points since 2009. Among these companies, 63% have at least one female director, and 13% have at least three women—a level that some research suggests may constitute a critical mass and allow women’s leadership styles to come to the fore. As we noted last year, women make up a higher percentage of directors in developed markets (11.8%, up from 11.2% last year) than they do in emerging markets (7.4%, both this year and last).

Underlying the incremental pace of global change are very heterogeneous trends in female board representation in different countries and regions. Leading the globe on gender-diverse boards is Europe, where legal requirements for women’s representation exist or are being considered at both the EU level and in various countries. Norway, Sweden and Finland continue to lead the developed world in their percentage of female directors, with 36.1%, 27.0%, and 26.8%, respectively. Significant increases in women’s representation are also happening in Italy and France, following the passage of recent laws on board diversity. France now ranks 4th in the world, with 18.3% female directors. (In Spain, however, where a law exists but enforcement mechanisms are weak, much less change has occurred.) In addition to raising their percentages of female directors over the last year, Italy, France, Germany, and the Netherlands have all seen sharp increases (of between 8-18 percentage points) in the proportion of companies with at least three women. Over half of French boards, and a third of those in Germany, now have at least three female directors.

…continue reading: 2013 Women on Boards Survey

In our paper, Managerial Attitudes and Corporate Actions, forthcoming in the Journal of Financial Economics, we use a survey-based approach to provide new insight into the people and processes behind corporate decisions. This method allows us to address issues that traditional empirical work based on large archival data sources cannot. For example, we are able to administer psychometric personality tests, gauge risk-aversion, and measure other behavioral phenomena. Our mode of inquiry is similar to those of experimental economists (who often administer gambling experiments) and psychologists (who administer psychometric tests). As far as we are aware, no other study attempts to measure attitudes of senior management directly through personality tests to distinguish CEOs from others and U.S top level executives from non-US top level executives. We also relate CEO attributes to firm-level policies.

Our survey quantifies behavioral traits of senior executives and also harvests information related to career paths, education, and demographics. We ask these same questions of chief executives and chief financial officers, among public and private firms, and in both the US and overseas. We can thus compare traits and attitudes for US and non-US CEOs to see if there is indeed a significant difference in attitudes. We also ask questions related to standard corporate finance decisions such as leverage policy, debt maturity, and acquisition activity. This allows us to relate attitudes and managerial attributes to corporate actions. We also examine how managerial attributes such as risk-aversion and time preference relate to compensation at the firm level.

…continue reading: Managerial Attitudes and Corporate Actions

The 2012 Board Practices Report (the “Report”) is the eighth edition published by the Society of Corporate Secretaries and Governance Professionals. The Report presents findings from a survey conducted in July and August 2012 of the Society’s membership, which includes 3,000 individuals from more than 1,600 companies of varying sizes, industries, and organizational structures. The questions cover 16 board governance areas, including both established board practices and new trends in board activity.

The Report and its accompanying questionnaire were developed with Deloitte LLP’s Center for Corporate Governance.

Methodology

The survey, administered via an online application, contained a total of 78 questions, not including the sub-questions applicable to questions 16, 17, 19, 37, 50, and 74. A total of 195 individuals participated in the survey, although not all questions were answered by all respondents. In such cases, an “n” value is included with the result. Results from the 2011 Board Practices Report are included where available to show trends in various sections of the Report.

Percentages are based on the number of respondents to a particular question, and in some instances, percentages that should together form a whole may not add up to 100% (e.g., 28% “Yes,” 73% “No”), due to rounding to the nearest whole digit.

Participation in the survey was confidential, and the results provided cannot be attributed to a specific company.

…continue reading: 2012 Board Practices Report

Since 2003, Fenwick has collected a unique body of information on the corporate governance practices of publicly traded companies that is useful for all 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] In this report, we present statistical information for a subset of the data we have collected over the years. These include:

…continue reading: Corporate Governance at Silicon Valley Companies 2012

GMI Ratings’ 2012 Women on Boards survey includes data on over 4,300 companies in 45 countries around the globe. The results show incremental improvement in most measures of female board representation since our 2011 report. For the first time ever, women hold more than one in ten board seats globally: 10.5% of the directors in our coverage universe are now women, a 0.7 percentage point increase from last year. At the same time, the percentage of companies with no female directors at all has fallen below 40% for the first time, to 39.8% (a two percentage point decrease since last year). Moreover, the percentage of companies with at least three women — a level that some research suggests may constitute a critical mass and allow women’s leadership styles to come to the fore [1] — has risen by 1.3 percentage points, to just under one-tenth (9.8%) of companies worldwide.

However, these global statistics mask important differences, both among individual countries and between blocks of countries at different stages of economic development. For example, when the world’s industrialized economies are viewed as a group, 11.1% of directors are women, 63.3% of companies have at least one woman on the board, and 10.5% of companies have three or more female directors. For emerging markets as a group, only 7.2% of directors are women, 44.3% of companies have at least one woman on the board, and 6.3% of companies have at least three female directors. Furthermore, national statistics within each group vary widely. For example, over 36% of Norway’s directors are women, compared to less than 13% of Germany’s and just over 1% of Japan’s; South Africa has over 17% female directors, China 8.5%, and Brazil 4.5%.

…continue reading: 2012 Women on Boards Survey

The 2011 Corporate Contributions Report, which was recently released by The Conference Board, discusses findings from a survey of 139 U.S.–based corporations conducted between April and July 2011. Participants in the survey (chief financial officers, corporate sustainability officers, heads of public affairs) were asked to provide information on the domestic and international (cash and non-cash) charitable contributions made directly by their companies or through their corporate foundations in FY2010.

To enable its practical use for peer-comparison purposes, the information in the report is organized by the size of contributions programs, ten industry groups and three business types (whether B2B, B2C or hybrid companies). The study also provides benchmarking ratios (such as contributions per employee, contributions as a percentage of pretax income and of annual sales), data on the geographic allocation of international charity and insight on program beneficiaries. The report contains data comparisons with FY2008.

…continue reading: The 2011 Corporate Contributions Report

As a critical component of ISS’ annual policy formulation process, ISS is seeking comment from institutional investors, corporate issuers, and other governance market participants on its proxy voting policy updates while they are still in draft stage. ISS is requesting comments on both its U.S. and international policies.

In response to a number of requests from investors, issuers and market intermediaries, ISS has extended the deadline for commenting on its 2012 draft proxy voting policies through Nov. 7.

The comments received on ISS’ 2012 draft policies from all market participants are invaluable to ISS as they help ensure that ISS’ draft policies reflect the perspectives of the corporate governance community and the best practices in corporate governance. ISS gathers broad input each year from institutional clients and market constituents through policy surveys, issue-specific roundtables, and this unique open comment period. During this year’s policy survey, more than 300 respondents weighed in on issues that included executive compensation, board independence, engagement triggers, and social and environmental issues. The full results from the survey are posted on the ISS Policy Gateway.

ISS will release its final 2012 U.S. and international policy updates during the week of Nov. 14 and its Global Policy Summary and Concise Guidelines in December. To participate in ISS’ comment period and learn more about its policy formulation process, please visit the ISS Policy Gateway.

…continue reading: ISS Seeks Comment on Draft Proxy Voting Policies

The Conference Board, NASDAQ OMX and NYSE Euronext announced last week a research collaboration to document the state of corporate governance practices among publicly listed corporations in the United States.

The centerpiece of the collaboration is The 2011 Board Practice Survey, which the three organizations are disseminating to their respective memberships. Findings will constitute the basis for a benchmarking tool searchable by company size (measured by revenue and asset value) and 22 industry sectors. In addition, they will be described in the new edition of The Directors’ Compensation and Board Practices Report, scheduled to be released jointly in the fall.

The Conference Board’s annual benchmark series on director compensation was first released in 1939. In the last decade, the database has been expanded to report on a wide array of governance practices, documenting a steady transformation in the role of public companies’ boards and underscoring the increasing importance of directors’ monitoring responsibilities and the growing influence of shareholders.

…continue reading: The 2011 Survey of Board Practices

A brief look back to the 2009 proxy season reveals one of the most contentious seasons in recent memory. Investor support for board nominees was at an all-time low, proxy contests were at an all-time high and support for shareholder-sponsored resolutions had dramatically risen. As the 2010 proxy season approached, corporate directors knew that it was incumbent on them to restore the trust that was shattered by the market downturn.

The 2010 proxy season was the dawning of a new era in the way director nominees are elected because, for the first time, uncontested director elections were to be considered “non-routine” under New York Stock Exchange (“NYSE”) rules and thus could not be bolstered by the uninstructed broker discretionary vote. Companies also had to make adjustments in anticipation of the new legislation being drafted by Congress that had squarely focused its attention on reforming our financial system and that would impose new requirements on publicly traded companies to rein in perceived egregious compensation practices. Although companies knew that the reform efforts could not be enacted during the current proxy season, they were aware that the proposed changes could reshape the landscape of corporate governance in the United States. The past season demonstrated that companies are starting to prepare for the brave new world that shareholder activism and congressional reform are in the process of creating.

…continue reading: The 2010 Proxy Season: A Brave New World

Without question, the role of public company boards and their corporate governance policies and practices continue to face intense scrutiny. That much of this scrutiny comes from shareholder activists and institutional investors comes as no surprise. Demands from these shareholders for greater “shareholder democracy” and involvement in corporate governance have been growing in line with the remarkable increases in the size of institutional investors’ portfolios over recent decades. Pressures brought by investors on corporate governance practices and policies have become even more acute in the last three years.

…continue reading: Corporate Governance of the 100 Largest US Public Companies