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11/2/22 – Issue 7.92 – Your weekly news on all things board. 

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Boards are getting younger! For a host of reasons, boards have seen more turnover lately, with average director tenure at Russell 1000 companies now just shy of eight years. As they seek new talent, many boards are bringing on younger directors, driving the average age down each of the past three years. In other boardroom news. Boardspan’s latest Board Performance Assessment Benchmarks reveal that boards generally feel confident in their performance on table stakes issues like Ethics & Values and Fiduciary Responsibilities, even as they recognize they have not performed as well on Management Succession Planning and ESG oversight. Meanwhile, Elon Musk remains in the headlines, as he follows up his acquisition of Twitter with a spate of executive dismissals and now the dissolution of the social media company’s board of directors.

 

Boardspan Newsflash:
Responding to reader demand, we’ve introduced a new Boardspan blog. You won't find a more thoughtful and comprehensive analysis of board governance and activity than from the experts right here at Boardspan. Benefit from decades of experience with boards: public, nonprofit, and private. Check it out!

 

In the Spotlight

 

Musk Dissolves Twitter’s Board

“Elon Musk has dissolved Twitter's board of directors - cementing his control over the social media platform. The multi-billionaire will be its chief executive after buying the company last week, ending months of back and forth over the $44bn deal. He has moved quickly to put his mark on the firm, which is used by politicians and journalists around the world. The reforms he is contemplating include changes for how Twitter verifies accounts, as well as job cuts… Top executives have already been removed, as Musk brings in high profile allies to the company. The latest move will mean that he is now chief executive of three companies. Along with taking the top role at Twitter, Musk is chief executive of electric car maker Tesla and rocket company SpaceX.” BBC

Across the Board

 

Management Succession Planning and ESG Top List of Board Challenges

Boardspan is excited to share some highlights from our recently released 2022 Board Performance Assessment Benchmarks…. Our data represents the views of boards nationwide across all sectors, collected and analyzed by Boardspan. The collective data indicates areas where boards think they are doing well and identifies challenges they face. What do this year’s benchmarks reveal? Management Succession Planning and ESG top the list of areas where boards would like to perform better, even as results show that boards have made progress in both of these topics since 2021. Boards express confidence in their performance around Ethics and Values, Fiduciary Responsibilities, and Access to Management/Access to Board Members. In these three areas, all critical to high-performing boards, boards scored themselves higher than in any other topic areas. Read the full report.

 

Boards Are Getting Younger

“The Great Resignation. The Big Quit. The Great Reshuffle. Call it what you want, but a spate of early retirements brought on by the pandemic helped make corporate boards younger. According to Bloomberg ESG data, the average age of board members at Russell 1000 companies dropped to 61.8 years through Oct. 2022, down from a high of 62.5 years in 2019. The average age of US board members has now decreased for three straight years, reversing a decades-old trend that saw corporate boards consistently growing older…The changes are occurring as baby boomers hasten their exodus from the workforce and companies pursue replacements who are younger, more diverse and who can contribute expertise toward emerging issues like cybersecurity and ESG…According to the analysis, the average tenure of board members dropped to 7.9 years in 2022, the lowest rate since 2015 and nearly a year less than the pandemic high of 8.7 years.” BLOOMBERG

 

Opinion: Boards Should Look Up to Europe When It Comes to ESG

"France and Europe are at the forefront of ESG regulation. They have taken steps that go far beyond mere reporting requirements, aiming at designing a new capitalism. This so-called responsible capitalism will have significant consequences for European companies, but also for non-European companies doing business in Europe… At a time when the United States is avidly debating the advisability of introducing climate disclosure rules for public companies, or additional information regarding professional investors’ ESG investment practices, a closer look should be taken at what Europe, led by France, has already accomplished in this area and where major current reforms are leading.” HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE

 

Most Large U.S. Companies Link Exec Pay to ESG Performance

"Large US companies are increasingly linking executive compensation to some form of ESG performance, with the share growing from 66 percent in 2020 to 73 percent in 2021… Just a minority of polled corporate executives say including ESG (environmental, social, and governance) performance goals in executive pay is very important in achieving their ESG goals. Most view such measures as being of medium importance, which indicates that incorporating ESG measures into compensation is just part of companies' broader efforts to achieve their objectives…. From 2020 to 2021, the share of S&P 500 companies incorporating DE&I (diversity, equity and inclusion) goals in executive compensation grew from 35 percent to 51 percent. And carbon footprint and emission goals nearly doubled, increasing from 10 percent to 19 percent.” THE CONFERENCE BOARD

From the Boardspan Library

Haven’t Done a CEO CEO Review? You Should!

"At the end of the day, it’s management’s strategy. But the long-held view that the board’s role is limited to reviewing, understanding, and signing off on the strategy is giving way to deeper board engagement. Increasingly complex business conditions demand it, investors and stakeholders expect it, and lead directors are uniquely positioned to find the right level of engagement and facilitate quality discussions … the extent of the board’s engagement in strategy will vary by company as well as the lead director’s mandate and leadership style-—from having a light touch to being more active. It’s important to work with the CEO and board to find the right depth and dynamics.” BOARDSPAN

Seat at the Table 

  • Materials science company Avery Dennison welcomes to its board Bill Wagner, former President and CEO of holding company GoTo Group
  • Charles Schwab adds to its board Carrie Schwab-Pomerantz, managing director at Charles Schwab
  • Dollar General welcomes to its board Jeff Owen, CEO of Dollar General
  • AI drug creation company Absci Corporation elects to its board Dan Rabinovitsj, VP of Connectivity at Meta
  • Bath & Body Works welcomes to its board Gina Boswell, CEO of Bath & Body Works
  • Public utilities provider Essential Utilities appoints to its board Bryan Lewis, VP and Chief Investment Officer of the United States Steel Corporation
  • Digital technology company Endava elects to its board Kathryn Hollister, former Partner at consulting firm Deloitte
  • Automotive digital marketplace TrueCar adds to its board Brendan Harrington, General Manager of Capistrano Valley Toyota
  • Biotechnology company Novak welcomes to its board Rick Rodgers, former EVP and Chief Financial Officer at oncology biopharmaceutical company Tesaro
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About Boardspan
Boardspan is the leading provider of digital governance solutions for boards across all sectors. Our cloud-based assessments, benchmarking analytics and governance education programs complement our board search and advisory services to deliver a holistic approach to governance. Boards of all sizes and stages rely on Boardspan to deliver analytics, insights and outcomes that improve their effectiveness and performance. Clients include KKR, The Kellogg Foundation, Ingersoll Rand, Farfetch, McAfee, Beyond Meat, Box, e.l.f. Beauty, Satellite Healthcare and the U.S. Olympic & Paralympic Committee.

     
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