In many respects boards of industrial companies in the S&P 500 index — defined as 97 companies in the materials and industrials primary sectors — are similar to S&P 500 boards.
- The average age of independent directors on industrial boards is 63.1 years, compared to 63.0 years for S&P 500 boards.
- The youngest industrial board averages 53.3 years of age, the oldest, 83.8.
- Industrial boards average 10.4 directors, compared to 10.7 members on S&P 500 boards.
- Independent directors represent 86% of all directors on industrial sector boards, compared with 85% of all S&P 500 directors.
- The average board tenure of independent directors on industrial boards is 8.0 years, just below the 7.9 year average for the S&P 500 index.
- The longest-tenured industrial board averages 35.5 years of board service.
Gender diversity of industrial boards slightly lags the S&P 500 universe, with women representing 27% of all industrial board members in 2020, compared to 28% of S&P 500 directors.
Every S&P 500 board has at least one female director. Ninety-five percent (95%) of the S&P 500 index have at least two female directors, and two-thirds (67%) of S&P 500 boards have three or more female directors. In contrast, just under 60% of the industrial boards have three or more women directors. Thirteen S&P 500 boards are composed of at least 50% women, including one industrial board.
Representation of Women Directors on Industrial Boards
When it comes to race/ethnic diversity of the boardroom, 18% of the directors of the 42 industrial companies in the top 200 companies are minorities (defined as Black/African American, Hispanic/Latinx and Asian), slightly below the 20% average for the S&P 500 index. The diversity breakdown of industrial boards generally matches the S&P 500: 11% Black/African American (compared to 10% of S&P 500 directors); 4% Hispanic/Latinx (compared to 4% S&P 500); and 3% Asian (compared to 5% S&P 500). According to the U.S. Census Bureau, about 40% of the U.S. population is estimated to be a minority, including 18.5% Hispanic/Latinx, 13.4% Black/African American, 5.9% Asian.
New independent director backgrounds
Fifty-five companies — 57% of the surveyed S&P 500 industrial companies — added at least one director over the past year. Appointees averaged 58.4 years of age, slightly higher than the 57.8 average for all independent directors joining S&P 500 boards. First-time directors represented 28% of directors joining industrial boards, matching the 28% overall average for the S&P 500.
Of the 87 directors joining industrial boards over the past year, 62% are diverse: 49% are women; 13% are minority men. The appointments slightly outpace the S&P 500, where 59% of the incoming 2020 class are diverse, including 47% women and 12% minority men.
Less than half (46%) of the directors joining industrial boards are actively employed, compared to 49% of independent directors joining S&P 500 boards. Compared to the S&P 500 incoming class of independent directors, industrial boards recruited in 2020 a higher percentage of leaders of divisions/subsidiaries and functional units and former government/military officials. Industrial boards appointed relatively fewer directors with financial experience.
|2020 Industrials||2020 S&P 500|
|Chairs / presidents / COOs||7%||6%|
|Line and functional leaders||20%||16%|
|Division / subsidiary presidents||11%||7%|
|Finance / accounting executives||14%||27%|
|Financial executives / CFOs / treasurers||9%||14%|
|Investment managers / investors||3%||8%|
|Bankers / investment bankers||1%||4%|
|Public accounting executives||1%||1%|
|Academics / nonprofit executives||2%||3%|
|Government / military||10%||5%|
The chair and CEO roles are separated at 49% of industrial boards — lower than the 55% average for the S&P 500 index. Executive chairs are in place at 14% of industrial boards, compared to 13% for the S&P 500. Independent directors chair 33% of industrial boards (compared to 34% of the S&P 500), while 71% of industrial boards have an independent lead director (compared to 73% of the S&P 500).
Board organization and process
Compared to the S&P 500 index, more industrial boards have three-year terms (classified boards) and age limits for directors. Industrial board committees — number, size and meeting frequency — are similar to S&P 500 committees.
|2020 Industrials ||2020 S&P 500|
|Board meetings (avg #)||7.9||7.9|
|Board committees (avg #)||4||4.2|
|Size (avg #)||4.6||4.4|
|Meetings (avg #)||7.9||8.2|
|Size (avg #)||4.6||4.3|
|Meetings (avg #)||5.3||5.9|
|Nominating / governance committee|
|Size (avg #)||4.7||4.4|
|Meetings (avg #)||4.3||4.5|
|Retirement age (avg)||73.8||73.6|
Editor's note: Data in tables and charts may not total 100% due to rounding.
Industrial Sector Companies
A. O. Smith Corporation
Air Products & Chemicals
Alaska Air Group
Allegion Public Limited Company
American Airlines Group
Avery Dennison Corporation
C.H. Robinson Worldwide
CF Industries Holdings
Deere & Company
Delta Air Lines
DuPont de Nemours
Eastman Chemical Company
Emerson Electric Company
Expeditors International of Washington
Fortune Brands Home & Security
General Dynamics Corporation
General Electric Company
Huntington Ingalls Industries
Illinois Tool Works
International Flavors & Fragrances
International Paper Company
J.B. Hunt Transport Services
Jacobs Engineering Group
Johnson Controls International
Kansas City Southern
Lockheed Martin Corporation
LyondellBasell Industries N.V.
Martin Marietta Materials
Nielsen Holdings plc
Norfolk Southern Corporation
Northrop Grumman Corporation
Old Dominion Freight Line
Packaging Corporation of America
Robert Half International
Sealed Air Corporation
Southwest Airlines Co.
Stanley Black & Decker
The Boeing Company
The Mosaic Company
The Sherwin-Williams Company
Union Pacific Corporation
United Airlines Holdings
United Parcel Service