Corporate Governance

Shearman & Sterling LLP This is our 11th Annual Survey of Corporate Governance Practices of the Largest US Public Companies (the "Survey"). Since we published last year's Survey, there has been no respite for corporate boards from the intense scrutiny of corporate governance practices that has developed over the last several years. To the contrary, the focus on the corporate governance practices of US-listed companies (as well as those listed abroad) by investors, proxy advisory firms and academics appears only to be increasing. Today, as our Survey demonstrates, there are a number of corporate governance practices that have been adopted widely and, at least to some extent, have become accepted "best practice." The use of a majority voting standard in uncontested director elections, the declassification of boards of directors so that each director stands for election annually and the removal of shareholder rights plans (or "poison pills") that US-listed companies in the past maintained to deter unsolicited takeovers are examples of such practices. There are also governance practices that, while gaining momentum, have not yet become as widely accepted. These include the separation of the CEO and board chairman roles and permitting shareholders satisfying certain INTRODUCTION ownership criteria to include board nominees in the company's proxy statement (often referred to as "proxy access"). While it remains to be seen whether these governance practices will one day enjoy widespread adoption, we expect interest in them, as well as corporate governance practices more generally, to remain high for the foreseeable future. WOMEN IN LEADERSHIP For the first time, we reviewed the role that women play in leadership positions at the Top 100 Companies. 1 All of the Top 100 Companies have at least one woman serving as a director, and 90 companies have at least two women serving as directors. On a percentage basis, women hold approximately 21% of the total number of board seats at the Top 100 Companies, but only two of the Top 100 Companies have boards where women hold 40% or more of the board seats. Women serve as the Chief Executive Officer at eight of the Top 100 Companies. The role of women in leadership positions at listed companies (both in the US and abroad) has received significant attention recently and we expect the momentum that the issue has garnered to continue to build. 1 See "Survey Methodology" on page 48 of this Survey for the list of the Top 100 Companies.

• Cover