How do the technical skills and expertise present among your board’s members compare with the skills and expertise reported by public companies in the Society of Corporate Secretaries and Governance Professionals’ “2011 Board Practices Report”?
Public companies’ boards have been focusing on board composition as a result of SEC proxy rules adopted in 2010, requiring disclosures explaining what qualifications boards take into account in nominating candidates for election as directors and what skills and expertise the existing directors offer to the company.
Acredula has been a leading advocate for an “expertise” board. An “expertise” board is composed of persons each having particular experience, skills, or expertise needed for the board to have, as a whole, all of the experience, skills, and expertise necessary to achieve its future objectives. This is in contrast to a “constituency” board, which is composed of persons who represent the view of a particular constituency (such as the US Congress or a state legislature). We endorsed the 2010 SEC proxy rules increasing disclosures about board composition and are encouraged with the results on technical skills and expertise being reported by public companies in the Society’s survey.
Below are the skills and expertise present among board members reported by public companies in the Society’s survey:
Percent of companies reporting they have the following technical skills and expertise present on their boards:
Click here to view the table.
The Society’s survey reported little distinction between boards with more than 10 directors and those less than 10 in terms of technical skills and expertise. However, the survey did find that non-financial services boards were more likely to have directors with skills and expertise in areas of operations, international business exposure, mergers and acquisitions, risk management, and corporate governance. This is a bit contrary to our experience with financial services boards with respect to risk-management and corporate-governance skills and expertise.
The Society’s 2011 Report is available at the Deloitte Center for Corporate Governance at http://www.corpgov.deloitte.com/site/us/ as the “2011 Board Practices Report” under the page “Board Governance.”