Corporate boards are facing demands for change. Outside forces, including activists, institutional investors and legislators, are pushing boards to expand the diversity of perspectives around the board table to include more women, racial and ethnic minorities, younger executives, and leaders with the skill sets for emerging business challenges.
How are Houston company boards responding? Each year, the Spencer Stuart Houston office tracks trends in board composition, practices and compensation among Houston’s leading companies in our annual Houston Spencer Stuart Board Index. The 83 companies included in the 2020 index are headquartered in the Houston area and are publicly traded on the NYSE or NASDAQ.
Highlights from the 2020 index include:
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More new directors: Forty-three (52%) of the 83 companies in the index elected new board members, compared with 36 of the 83 (43%) in the 2019 index. Companies added 58 new
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More women in the boardroom: Houston companies added 28 new independent female directors, a 17% increase from 2019. Female directors now account for 25% of all independent
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A majority of Houston boards, but fewer than the S&P 500, have mandatory retirement policies: 57% of Houston boards report having a mandatory retirement age, little changed from 58% in 2019. By comparison, 70% of S&P 500 boards report a mandatory retirement age.
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More Houston boards separate the chair and CEO roles: 66% of Houston companies separate the chair and chief executive officer roles, compared with 64% last year. By comparison, 55% of S&P 500 companies separate the chair and CEO roles.
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Cash retainers remain below national averages: The average cash retainer decreased slightly from $83,142 in 2019 to $82,450 in 2020, 16% below the S&P 500 average of $98,240. However, the average retainer ($103,889) for Houston companies with revenue of more than $5 billion is far closer to the S&P 500 average.