BOARD STRUCTURE

DATA SPOTLIGHT

David F. Larcker and Brian Tayan

Corporate Governance Research Initiative
Stanford Graduate School of Business

NUMBER OF DIRECTORS
There are approximately 40,000 directors of publicly traded companies in the U.S.

2009
Number of firms
Number of directors
Data from Equilar; calculations by the authors

2010

2011

2012

4,650

4,972

4,624

4,249

42,642

45,242

42,557

39,547

NEW DIRECTOR BACKGROUNDS

Directors have a diverse set of executive, financial, and other experience.

Spencer Stuart Board Index (2015)

WISH LIST FOR DIRECTOR BACKGROUNDS

Boards are looking to add directors with financial, industry, and leadership expertise.
Diversity is also important.

Spencer Stuart Board Index (2015)

DIRECTORS WITH CEO EXPERIENCE

Directors who are active CEOs are being replaced by retired CEOs and directors with
other corporate executive experience.

Spencer Stuart Board Index

FEMALE DIRECTORS
The average percentage of female directors on boards is low, but growing.

Spencer Stuart Board Index

FEMALE DIRECTORS
Still, the U.S. lags most developed nations in female board representation
Country
Norway

% Female
39%

Sweden

29%

Malaysia

12%

France

28%

Switzerland

11%

Finland

28%

Thailand

11%

Denmark

24%

China

10%

Italy

22%

Turkey

10%

Netherlands

20%

Hong Kong

9%

Germany

19%

Singapore

8%

Belgium

18%

Greece

8%

United Kingdom

18%

India

8%

South Africa

18%

Mexico

7%

Australia

17%

Brazil

6%

Austria

17%

Russia

6%

Israel

17%

Taiwan

5%

Ireland

16%

Chile

4%

Poland

15%

Indonesia

4%

Canada

14%

Japan

2%

Spain

13%

South Korea

2%

MSCI (2014)

Country
United States

% Female
13%

DIRECTOR COMPENSATION
Director compensation varies with company size.
Mix of pay (cash vs. equity) does not.

Equilar, S&P 1500 Board Profile Committee Fees (2013)

DIRECTOR COMMITTEE FEES

Audit committee members receive larger annual retainers than
other committee members.

Equilar, S&P 1500 Board Profile Committee Fees (2013)

STAGGERED (CLASSIFIED) BOARDS

The number of companies with a staggered board structure has declined.

SharkRepellant

BOARD INDEPENDENCE
Boards have become (modestly) more independent over time.

Spencer Stuart Board Index

BOARD CHAIRMAN
Companies have gradually moved to separate the chairman and CEO roles.

Spencer Stuart Board Index

SEPARATING CHAIRMAN AND CEO

Companies primarily separate chairman and CEO roles during a succession event,
often on a temporary basis.

Larcker and Tayan (2016)

COMBINING CHAIRMAN AND CEO

However, companies also often combine the two roles as part of a succession.

Larcker and Tayan (2016)

BUSY DIRECTORS
Fewer than 10% of directors are considered busydefined as serving on three or
more public company boards at the same time.
Number of Directorships

Directors

Seven or more

10

0.0%

Six

23

0.1%

Five

119

0.3%

Four

464

1.2%

Three

1,794

4.5%

Two

6,035

15.3%

One

31,102

78.6%

Total unique directors

39,547

100.0%

Data from Equilar; calculations by the authors

Potentially busy
directors

DISTRIBUTION OF COMMITTEE WORKLOAD

Are directors who sit on multiple high-work committees also too busy?...
2002

2007

2012

Audit committee size

3.6

3.8

3.7

Compensation committee size

3.5

3.8

3.7

Nominating/Governance committee size

3.8

3.8

3.7

Overlap audit and compensation committees

1.7

1.7

1.4

All compensation on audit committee

18%

13%

9%

All audit on compensation committee

14%

13%

9%

Same directors on audit and compensation

10%

8%

6%

Audit chair on compensation committee

36%

39%

32%

Compensation chair on audit committee

32%

42%

35%

4%

6%

4%

Same directors on audit, comp, and nom/gov

Larcker, Tayan, and Zhu (2014)

AUDIT AND COMPENSATION COMMITTEE OVERLAP

or do overlaps help to share knowledge across committees?

Larcker, Tayan, and Zhu (2014)

BIBLIOGRAPHY
Note: Data varies across sources depending on the attributes of the companies included in the sample, such as size and industry.
Equilar directorship data. Fiscal year ending June 2012 to May 2013.
Equilar. S&P 1500 Board Profile Committee Fees: Parts 1 and 2. 2013.
David F. Larcker and Brian Tayan. Chairman and CEO: The Controversy over Board Leadership. June 24, 2016. Stanford Closer Look
Series.
David F. Larcker, Brian Tayan, and Christina Zhu. A Meeting of the Minds: How Do Companies Distribute Knowledge and Workload
across Board Committees? December 8, 2014. Stanford Closer Look Series.
MSCI. Governance Issue Report: 2014 Survey of Women on Boards. 2014.
NACD. Public Company Governance Survey. 2014.
SharkRepellent, FactSet Research Systems, Inc. S&P 1500 Staggered (Classified) Board Trend Analysis 1999-Present. 2015.
Spencer Stuart. Spencer Stuart U.S. Board Index. 2007-2015.