U.S. Boardrooms are Changing, 2017 Spencer Stuart U.S. Board Index Finds

Number of new independent directors up 15% from the previous year


S&P 500 boards appointed 397 new independent directors in the 2017 proxy year, the highest number since 2004, and for the first time, just over half (50.1%) of the new directors were women and/or minorities (compared with 42% in 2016), according to a new study by Spencer Stuart, one of the world’s leading executive search and leadership advisory firms. The 2017Spencer Stuart U.S. Board Index found that boards are evolving in other ways in the face of growing investor interest in whether boards are composed of a diverse mix of skills, qualifications, perspectives, and backgrounds that align with the company’s current and future strategic objectives and risks.

A record-breaking 45% of the incoming directors during the 2017 proxy year were serving on their first outside corporate board. And while the number of first-time directors is at an all-time high, the number of S&P 500 CEOs who serve on one or more boards is a record low 37%, a decrease from 52% 10 years ago.

“Board composition is an important governance issue for many institutional investors,” said Julie Hembrock Daum, who leads Spencer Stuart’s North American Board Practice. “Boards can continue to make progress on this front by committing to regularly reviewing and refreshing the board and by casting a wide net to include first-time director candidates.”

Spencer Stuart’s research also found:

  • Female representation among new S&P 500 directors rose to 36% (142 directors), the highest since Spencer Stuart began tracking this data in 1998. Meanwhile, minority males (defined as African-American, Hispanic/Latino or Asian) made up 14% or 57 of the new independent directors. Six percent or 25 of the new directors were women and minorities. Minorities are defined as African-American, Hispanic/Latino or Asian. Individuals of Indian descent have been counted as Asian beginning in 2017, which is consistent with U.S. Census Bureau methodology.
  • Despite the record number of new women directors, the percentage of women on S&P 500 boards increased only incrementally to 22% of all directors, up from 21% in 2016 and 17% in 2012. This is due in part to modest director turnover. Forty-eight percent of boards did not appoint a new director in the 2017 proxy year.
  • For the first time, more than half (51%) of S&P 500 boards have a separate chair and CEO.
  • Mandatory retirement ages continue to increase. Of the 73% of boards that have a mandatory retirement age, 42% set it at 75 or older, compared with just 11% in 2007.
  • Directors with financial backgrounds are in demand, representing 29% of the new S&P 500 directors in 2017, up from 19% in 2007.

The full 2017 Spencer Stuart U.S. Board Index will be released in mid-November and will be available on the Spencer Stuart website: www.spencerstuart.com.

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