Debevoise & Plimpton LLP has collaborated on the 2021 edition of Corporate Board Practices in the Russell 3000, S&P 500 and S&P MidCap 400. The report, which tracks trends and developments in corporate governance at US publicly traded companies, includes data on board composition and diversity, the profile and skill sets of directors, and policies on their election, removal, and retirement. The analysis is based on recently filed proxy statements and the review of organizational documents (including articles of incorporation, bylaws, corporate governance principles, board committee charters, and other corporate policies made available in the Investor Relations section of companies’ websites). The report also highlights practices across business sectors and company size groups.
Findings in this year’s analysis highlight the efforts undertaken by many companies to accelerate board refreshment and promote diversity of gender, race, and skills among their directors:
- For the first time in the report’s annual analysis, the majority (59%) of S&P 500 companies have disclosed the racial (ethnic) makeup of their boards. According to the disclosure available, boards remain overwhelmingly white, with some business sectors disclosing far more racial diversity than others.
- Both in small and mid-size companies, the number of female directors is showing marked increases and, among new directors, more than one-third are women. Large companies now have more boards with at least three or four females than boards with one or two.
- Companies still opt for the delegation of new duties to existing committees rather than the creation of new standing committees. However, three committees show a slow rise in numbers: risk; science & technology; and, environment, health & safety, with 3.2% of Russell 3000 companies having instituted the latter committee in 2020.
- The trend toward CEO-board chair separation, previously more pronounced among smaller businesses in the Russell 3000, is extending to the S&P MidCap 400, with only 33.2% of those companies still combining the two roles. Amid these governance changes, some companies are also tapping leaders with different backgrounds, including in the military or the government.
The Corporate Board report is a collaboration among The Conference Board, Debevoise & Plimpton, Russell Reynolds Associates, the KPMG Board Leadership Center (BLC), the John L. Weinberg Center for Corporate Governance at the University of Delaware, and ESG data analytics firm ESGAUGE.
Download a copy of the report here.