Stay current on changes and developments in corporate law with a wide variety of resources and tools.
Corporate boards are at their most willing in five years to see one of their own members replaced, according to an Oct. 17 survey from consultant PwC.
Almost half of the U.S. public company directors surveyed said at least one of their peers should step aside in favor of someone new. That’s the highest response PwC has gotten since it started asking the question in 2012.
Usually about a third of directors say a fellow director should go for reasons ranging from “advanced age” to a lack of preparedness or expertise.
PwC said this year’s jump may reflect a changing conversation about board refreshment. The renewal rate nearly doubled from 2008 to 2016 as companies in the S&P 1500 index have added new directors, a January analysis by Institutional Shareholder Services Inc. found. By 2016, nearly one out of every 10 directors serving on those boards was new.
“The board role is getting a lot of attention,” Paula Loop, who leads PwC’s governance insights center, told Bloomberg Law.
Some of that attention is coming from State Street Global Advisors, BlackRock Inc., and other institutional investors that are focusing on director diversity and skills. In 2016, women held just over 20 percent of board seats in the S&P 500 and minorities held only 14 percent of them, the ISS study found.
But when asked about diversity, more than half of directors told PwC that their board is diverse enough. Directors who are newer to a board are less likely to be satisfied with their boardroom’s diversity than those who have sat on a board for 10 years or more.
Boards are also getting more serious about measuring their own job performance with regular evaluations, ISS data show. “So I think we’re continuing to see the bar raised,” Loop said.
To contact the reporter on this story: Andrea Vittorio in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Yin Wilczek at email@example.com
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)