Issue link: https://digital.shearman.com/i/1484098
Shearman & Sterling LLP 1 | Introduction Shearman & Sterling is pleased to present our 2022 Corporate Governance & Executive Compensation Survey, marking our 20th annual survey since our first publication in 2003. Much has changed since we began the work of chronicling developments in corporate governance and executive compensation matters. Our surveys were initiated at a time of intense focus on strengthening traditional corporate governance practices. The financial markets were reeling from accounting scandals at Enron, Tyco and WorldCom and the subsequent indictment of Arthur Andersen. Congress had stepped in and passed the bipartisan Sarbanes- Oxley Act (SOX), mandating, among other things, comprehensive new responsibilities in the area of internal control over financial reporting and creating new standards for auditors and audit committees and new sources of liability and accountability for management backed up by significant criminal penalties. Introduction The shock of the governance failures of the Enron era gave rise to a new and powerful movement to develop governance best practices and to enhance the voice of shareholders and the power of independent boards as a check against management entrenchment and the risk of the "imperial" CEO. This corporate governance ferment took time to gain strength and did not, of course, result in immediate change. There was also considerable resistance to some of the calls for reform that appeared, at least to some, to stand in the way of operating a profitable business for the benefit of shareholders. It did, however, represent a sea change in the way investors viewed corporate governance practices and gave rise to an implacable effort on the part of investors and governance advocates, with varying levels of success, to push for advances that would better protect shareholder interests and reduce the risk of management excesses and self-dealing. In 2003, the CEO served as Board Chair in 80 of the Top 100 Companies, but only 18 appointed a lead independent director. In 2022, 54 of the Top 100 Companies combined the CEO and Board Chair roles, and 50 of the Top 100 Companies had lead independent directors.