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Survey on Composition of Governing Boards John P. Beavers Heidricks & Struggles 1995 Survey of chairmen of boards of 1674 public and private companies identified as fastest growing concerns by Hoover’s Top Emerging Companies considered as mid-cap with sales from $25 to $500 million. Board size Average number of members is seven, of whom on average four are independent outside members, two are insiders (i.e., employees), and one is an affiliated outside director (other than an employee). Board size is typically determined by the board (56.4 percent) although the CEO determines board size in 29.6 percent of the organizations. Experience
Shareholder representation 46.5% of mid-cap companies have representation on their boards of shareholders who are not officers. Diversity Although white women are represented as board members on 58% of mid-cap boards, mid-cap boards have not yet diversified in terms of race or national origin. Representation of management 71.2% of mid-cap boards are chaired by the organization’s CEO. 23.9% have a “founder” on the board and 10.3 percent have a family representative of the founder. 28.4% have the COO, and 22.8 percent have the CFO. Affiliated non-management directors 26.5% have their outside counsel as a member. Retired chairman 15.2% have a retired chair of the board as a member. Board recruitment Contrary to publicly held companies, 74.7% of mid-cap companies use their board members to recommend ned members, and only 22.9% of these companies delegate the job of finding directors to someone other than the CEO. Criteria for selecting a board member
Committees On average, three. With 59.9% of the companies, the committees are determined by the board; with 25.7%, committees are determined by the CEO. Time commitment Outside directors spend an average of 10 days per year to board matters, including committees. On average, there are 5 meeting days per year. Directors of 91.6% visit the company’s facilities; directors of 17.8% meet with large shareholders periodically. Independent directors of 23.4% meet separately from the rest of the board. Directors of 81.9% of mid-cap companies allow directors to contact anyone within the organization for information. Terms 48.2% of mid-cap companies have one-year terms, and 35.9% have three-year terms, for directors. 63.5% do not have staggered terms. Compensation Average compensation ob board members is $12,915 per year for attending meetings. 56% offer directors stock options (up from 25.3% in 1990). The only perquisite with most boards is travel with 68.5% covering travel expenses of directors in attending meetings. Most important issues facing boards
Most important contribution by board members
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