Boardroom INSIDER for… JUNE

 

WHY DO CORPORATE DIRECTORS STICK AROUND SO LONG?

 

(June, 2016) For the past few proxy seasons, investor activists and the media have grumbled about the need for “board refreshment” — shaking up corporate boards that are too pale, stale and male.  The result? U.S. boardrooms today are actually “older, longer tenured and more entrenched,” than a decade ago, according to an editorial in the June issue of online governance monthly Boardroom INSIDER.

BI publisher and board consultant Ralph Ward writes that surveys find “the average S&P 500 director age jumped a full year between 2010 and 2015, to 63.1 years old.”  Board tenure has also increased, and turnover of fresh talent slipped.

Why are board refreshment demands not only failing, but backfiring?  “Governance reforms themselves could be among the drivers,” Ward suggests.  Regulations and laws demanding higher skill, time and liability demands of directors are freezing the boardroom profile, making new talent harder to recruit, and current talents more irreplaceable.  The result — “a seller’s market for boardroom talent” — and boardroom stasis.

Also in the June Boardroom INSIDER:

pink Prep tips before your first board meeting.
pink Answering the “big questions” of board evaluation.
pink Q&A: How should we pay our board chair?