Corporate Governance

Corporate Governance and Exec Compensation 2021

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Shearman & Sterling LLP Board Refreshment | 36 Average Director Tenure The average board tenure at the Top 100 Companies is eight years. Age 70–71 Age 72 Age 73–74 Age 75 or older Topic not addressed Mandatory Retirement Age Although not required by either the NYSE or Nasdaq listing standards, 72 of the Top 100 Companies have disclosed a mandatory retirement age for their non-management directors. Of these, 43 companies expressly permit the board or a committee of the board to make exceptions to the retirement age policy. Age 72 continues to be the most common age set for mandatory retirement. 3 34 7 28 28 Mechanisms to Encourage Board Refreshment Three of the principal board refreshment mechanisms are mandatory retirement age, term limits and the board self-evaluation process. While the use of a mandatory retirement age mechanism continues to be high and term limits continue to be low, use of the board self- evaluation process mechanism appears to be increasing. 6 years of service 9 years of service 11–15 years of service Less than 6 years of service 22 8 years of service 7 years of service 10 years of service More than 15 years of service Board Refreshment Board refreshment continues to be one of the key issues facing nominating and governance committees, and boards as a whole, as they are increasingly under pressure to change the face of the boardroom by re-examining topics such as director tenure, experience, performance and diversity, with gender and ethnic diversity at the forefront. Data 15 10 14 17 3 2 17

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