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By Che Odom
April 12 — Some corporate boards are sharing with stockholders the matrices they use to evaluate themselves, an attorney from EMC Corp. said April 11.
Boards identify the traits needed in the ideal board, drawing up a set of criteria. The skills matrix is then used to evaluate each director and the board as a whole.
A number of companies are divulging their skills matrices in proxy materials, using charts, graphs and detailed biographies to show just how each director contributes to the entire board.
“You can show that you use a skills matrix to get the right mix of directors,” Susan Permut, EMC’s senior vice president and deputy general counsel, said at an Association of Corporate Counsel meeting in New York.
Wal-Mart Stores Inc., for example, includes graphs on its proxy statement that cover director experience, expertise, tenure, age, gender and attendance record.
General Electric Corp. uses graphics depicting board members’ leadership and industry experience, as well as global business experience, in its proxy materials. GE's graphics also attempt to rank areas such as finance experience, talent development and skills in technology, investor relations, risk management and marketing.
Some of these disclosures can look very busy, but those presented by Wal-Mart and GE serve as good models, Permut said. “There are good ways of doing this, so you’ll want to think about how you do” it if considering such inclusions in your proxy statement, she said.
When the matrix disclosure is not done well, shareholders may be put off, said Sarah Teslik, the former senior vice president of communications, public affairs and governance at Apache Corp.
“Some shareholders are not liking it because the matrix all look the same from company to company,” said Teslik, who now is at communications consulting firm Joele Frank, Wilkinson, Brimmer, Katcher.
The panel also spoke about companies employing corporate governance best practices, such as establishing independent board leadership, rotating leader positions on committees, eliminating staggered boards, aligning pay with performance and reviewing shareholder voting requirements.
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