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2021 Spencer Stuart Information Technology Sector Snapshot

2021 U.S. Spencer Stuart Board Index

Boards of information technology sector companies in the S&P 500 — a universe of 74 companies — tend to be smaller, younger and less tenured than S&P 500 boards as a whole.

  • The average age of independent directors on information technology boards is 62.6, slightly younger than the S&P 500 average of 63.0.
  • The youngest average age of an IT board is 53.3 years, and the oldest is 73.2.
  • IT boards average 9.8 members, one fewer director than the 10.8 director average for S&P 500 company boards and the smallest of all S&P 500 primary sectors.
  • Independent directors represent 86% of all directors on information technology company boards, identical to the 86% average for the S&P 500 universe.
  • The average tenure of independent directors on IT boards is 7.6 years, just shy of the S&P 500 average of 7.8 years.
  • The longest-tenured IT board is 20.3 years.

Diversity

The diversity of information technology boards outpaces the S&P 500 universe, with directors from underrepresented communities (women, Black/African American, Hispanic/Latino and Asian men) constituting 45% of directors on IT boards, compared with 43% of S&P 500 boards. The IT, consumer and utilities sectors tie with the second-highest percentage of directors from underrepresented communities. Women represent 29% of all IT board members in 2021, compared with 30% of S&P 500 directors. IT boards have the highest percentage of Asian directors (12%). The IT sector ties with the energy sector for having the lowest percentage of Black/African American directors (7%) and with the healthcare sector for having the lowest percentage of Hispanic/Latino/a directors (3%).

Both the IT sector and the S&P 500 index fall short of reflecting U.S. demographics. According to the U.S. Census Bureau, 51% of the U.S. population are women and about 42% identify as Hispanic/Latino/a (18.5%), Black/African American (13.4%), Asian (5.9%), American Indian or Alaskan native (1.3%) or multiracial (2.8%).

Thirty-one percent (31%) of IT companies disclosed director-specific race/ethnicity details, compared with 28% of all S&P 500 companies. About one-third (32%) of IT sector companies disclosed a commitment to including directors from underrepresented communities in searches for new directors, lagging the 39% average of S&P 500 companies.

Diversity of Information Technology Boards
 
 

Seven IT boards (9% of the sector) have no Black/African American, Hispanic/Latino/a or Asian directors. In contrast, 37 (8%) S&P 500 boards have no Black/African American, Hispanic/Latino/a or Asian directors, and all S&P 500 boards have at least one female director. Ninety-six percent (96%) of the S&P 500 index have at least two female directors, and more than two-thirds (72%) have three or more female directors. In contrast, 59% of IT boards have three or more women directors. Sixteen S&P 500 boards are composed of at least 50% women, including two IT boards.

New independent director backgrounds

Forty-two companies — 57% of the IT sector — have added at least one independent director over the past year. Appointees averaged 57.3 years of age, close to the 57.5 average for all independent directors joining S&P 500 boards. First-time directors represented 28% of independent directors joining IT boards in 2021, lower than the 35% overall S&P 500 average.

Directors from underrepresented communities constituted 79% of the 53 independent directors joining IT boards over the past year, compared with 72% of directors joining S&P 500 boards.

Diversity of Independent Directors Joining Information Technology Boards
 
 

Sixty-six percent (66%) of the independent directors joining IT boards are actively employed, compared to 56% of independent directors joining S&P 500 boards — and the highest of primary industry sectors. IT boards recruited the highest percentage of line/functional leaders of all sectors.

New Independent Director Functional Backgrounds
2021 Information Technology 2021 S&P 500
CEOs 25% 22%
Active 17% 12%
Retired 8% 10%
Chairs / presidents / COOs 2% 4%
Active 2% 2%
Retired 0% 2%
Line / functional leaders 28% 21%
Division / subsidiary leaders 4% 12%
Finance / accounting executives 25% 27%
Financial executives / CFOs / treasurers 17% 13%
Investment managers / investors 8% 8%
Bankers / investment bankers 0% 3%
Public accounting executives 0% 3%
Academics / nonprofit executives 6% 4%
Consultants 2% 1%
Legal  2% 4%
Others 8% 5%

Board leadership

Just under three-quarters (73%) of IT companies separate the chair and CEO roles — the highest percentage of all S&P 500 industry sectors and significantly higher than the overall S&P 500 average (59%). Independent chairs are in place at 50% of IT companies, significantly higher than the 37% for the overall S&P 500 and the most of any industry sector. Fifty-eight percent (58%) of all IT companies have an independent lead or presiding director, lower than the 70% average of the S&P 500 and the least of any industry sector.

Board organization and process

As detailed below, the IT sector’s governance processes and structures align with the overall S&P 500. One difference is the prevalence of mandatory retirement policies. While 70% of S&P 500 boards have adopted mandatory retirement policies, only 53% of IT sector companies have age limits for directors.

Board Organization and Process
2021 Information Technology 2021 S&P 500
Classified board 9% 10%
Board meetings (avg #) 8.9 9.4
Board committees (avg #) 3.7 4.2
Audit committee
Size (avg #) 4.1 4.5
Meetings (avg #) 8.7 8.4
Compensation committee
Size (avg #) 3.9 4.3
Meetings (avg #) 6.9 6.2
Nominating / governance committee
Size (avg #) 3.8 4.4
Meetings (avg #) 4.7 4.7
Mandatory retirement 53% 70%
Retirement age (avg) 73.5 73.7

Editor’s Note: The data in this report is taken from the 2021 U.S. Spencer Stuart Board Index which is based on our analysis of the most recent proxy reports from the S&P 500. The 2021 edition of the index draws on the latest DEF14A proxy statements from 493 companies filed with the SEC between May 28, 2020, and May 13, 2021.

Data in tables and charts may not total 100% due to rounding.
 

Information Technology Sector Companies

Accenture
Adobe
Advanced Micro Devices
Akamai Technologies
Amphenol Corporation
Analog Devices
Ansys
Apple
Applied Materials
Arista Networks
Autodesk
Automatic Data Processing
Broadcom
Broadridge Financial Solutions
Cadence Design Systems
CDW Corporation
Cisco Systems
Citrix Systems
Cognizant Technology Solutions Corporation
Corning
DXC Technology Company
Enphase Energy
F5 Networks
Fidelity National Information Services
Fiserv
FleetCor Technologies
Fortinet
Gartner
Global Payments
Hewlett Packard Enterprise Company
HP
Intel Corporation
International Business Machines Corporation
Intuit 
IPG Photonics Corporation
Jack Henry & Associates
Juniper Networks 
Keysight Technologies
KLA Corporation
Lam Research Corporation
Mastercard
Maxim Integrated Products
Microchip Technology
Micron Technology 
Microsoft Corporation
Monolithic Power Systems
Motorola Solutions
NetApp
NortonLifeLock
Nvidia Corporation
NXP Semiconductors
Oracle Corporation
Paychex
Paycom Software
PayPal Holdings
PTC
Qorvo
QUALCOMM
salesforce.com
Seagate Technology plc
ServiceNow
Skyworks Solutions
Synopsys
TE Connectivity 
Teradyne
Texas Instruments
The Western Union Company
Trimble
Tyler Technologies
VeriSign
Visa
Western Digital Corporation
Xilinx
Zebra Technologies Corporation

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