Transformation, board renewal on the agenda for U.S. technology companies for 2014

Second annual Spencer Stuart U.S. Technology Board Index highlights board’s role in business transformation as well as the latest trends in board composition, practices and compensation for top U.S. technology companies

In 2014, Boards will have a critical role to play in business transformation and strategy, particularly in light of the pace of market and competitive change today.

Drawing on the expertise of experienced board directors and an extensive review of proxy data, the second annual index considers how boards can work most effectively with the CEO and management team to future-proof the business and looks at trends around board composition and renewal.

Annual director elections have become the norm among top U.S. technology companies, with 70 percent of technology companies now electing directors annually, an increase from 67 percent in 2012. An additional 19 companies indicated in their proxies that they will adopt annual director elections in the next several years, pending shareholder approval.

Following national governance trends, the average mandatory retirement age among technology boards has now reached 73. However, technology companies are less likely than S&P 500 companies to report a mandatory retirement age — 45 percent versus 72 percent. While some boards are asking experienced directors to remain on the board longer, a review of technology company proxies also reveals an increase in the number of new independent directors, including a higher percentage of new female directors, suggesting that boards are interested in refreshing their skills and increasing the diversity of perspectives around the boardroom.

Technology companies, and especially those in Silicon Valley, have moved much more aggressively than the S&P 500 to adopt a board leadership model that separates the duties of the CEO and board chair, and it is a topic that boards continue to review and discuss. Sixty-five percent of technology boards and 71 percent of Silicon Valley boards separate the chairman and CEO roles, versus 45 percent of S&P 500 boards. As more technology companies separate the roles, they are less likely than the S&P 500 to have a lead or presiding director; 49 percent of technology company boards have a lead or presiding director, compared with 90 percent of S&P 500 boards.
Among other findings of the report are:

Technology boards have 8.6 members on average, about the same as Silicon Valley boards with 8.4 members.

66 percent of technology boards have at least one woman serving on the board.

Eighty-one technology companies included in the index added at least one new director; in all, 129 new independent directors joined technology boards.

Total annual director compensation among technology companies averages $215,666, 13 percent less than the Silicon Valley average of $242,632.

Stock compensation represents about half of director compensation for both Silicon Valley and technology companies overall.

From: Spencer Stuart

**Share the BLM Magazine with your executive colleagues and friends!

Follow the Magazine:

https://businessleadershipmanagement.wordpress.com/subscribe-follow-the-magazine/

(After you have filled in your email address in the column at the right hand side of the screen, a confirmation email will sent to your email address. You will have to confirm it before subscription begins)

Follow us on Twitter:

https://twitter.com/BusinessLeaders

Like us on Facebook:

https://www.facebook.com/BusinessLeadershipManagement

**As part of the Magazine’s drive to reward subscribers/followers, we will be providing subscribers/followers special access to exclusive content which will not be otherwise available to normal visitors. Please be sure to subscribe to the Magazine. Many visitors have given us positive comments that they will be bookmarking the site, but as the system is unable to capture a working email address to which the passcodes for exclusive content will be sent, they will miss out on this content. Do note that passcodes are locked to each exclusive content, not a one-for-all access, so do provide a working email address that you check regularly so as not to miss out on them!

Advertisements

One thought on “Transformation, board renewal on the agenda for U.S. technology companies for 2014

  1. Pingback: URL

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s