Issue link: https://digital.shearman.com/i/1512772
Shearman & Sterling LLP Board Refreshment | 74 Data Average Director Tenure The average board tenure at the Top 100 Companies is eight years. Mandatory Retirement Age Although not required by either the NYSE or Nasdaq listing standards, 69 of the Top 100 Companies have disclosed a mandatory retirement age for their non-management directors. Age 75 is the most common age set for mandatory retirement. Two-thirds, or 46 of these 69 companies expressly permit the board or a committee of the board to make exceptions to the retirement age policy. 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 and tenure limits continue to be low, use of the board self-evaluation process mechanism appears to be increasing, but it is unclear whether the self-evaluation process is leading to meaningful changes in refreshment practices. 6 years of service 9 years of service 11–15 years of service Less than 6 years of service 15 8 years of service 7 years of service 10 years of service More than 15 years of service 16 18 17 8 5 8 13 Board refreshment continues to be one of the key issues facing nominating and governance committees, as they are increasingly under pressure to change the face of the boardroom by addressing director tenure, experience, performance and diversity, with improving gender and ethnic diversity at the forefront. In 2003, 57 of the Top 100 Companies had a mandatory retirement age, with 70 as the most common age set for mandatory retirement. Age 70–71 Age 72 Age 73–74 Age 75 or older 0 2 29 7 31 Board Refreshment