Board Composition and Director Recruiting Trends

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Board Composition and Director Recruiting Trends, an Equilar publication, analyzes boards of directors as disclosed in annual proxy statements (DEF 14A) or amended 10-K filings (10-K/A) of the Equilar 500 and Russell 3000 companies over the last five years. Years are defined by fiscal year end dates between April 1st and March 31st. The Equilar 500 consists of the 500 largest, by reported revenue, U.S. headquartered companies trading on one of the major U.S. stock exchanges (NYSE, Nasdaq or NYSE MKT (formerly AMEX)), adjusted to approximate the industry sector mix of similar large-cap indices. The report identifies certain trends in the composition and disclosure of public company boards. Georgeson, KPMG’s Board Leadership Center and Semler Brossy Consulting Group offers independent commentary to provide context as to how companies structure boards and recruit directors within the current corporate governance landscape.

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Key Findings:

  • The percentage of women on Equilar 500 boards increased each year from 2014 to 2018, topping out at 22.8% in the most recent year.
  • The average board size of Equilar 500 companies was 10.7 in 2018, led by the utilities sector with an average board size of 11.4 directors.
  • The percentage of women in board leadership positions has declined by 10.1% at Equilar 500 companies from 2017 to 2018. However, female leadership has risen slightly, from 5.8% to 6.1%, at Russell 3000 companies over that same time frame.
  • Average director age has increased slightly over the last five years, reaching a pinnacle of 61.3 and 60.4 years in 2017 at the Equilar 500 and Russell 3000, respectively.
  • Both average and median director tenure have declined each year over the last five years, with the median tenure at Equilar 500 companies only 6.3 years in 2018, a 21.3% decrease from 2014.