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Board Composition: New Directors

2017 Spencer Stuart U.S. Board Index

2017 Snapshot

Video: Board composition highlights


Highest Number of New Independent Directors Elected in Over a Decade

  • S&P 500 boards included in our index appointed 397 new independent directors during the 2017 proxy year, the most since 2004.
  • The number of new independent directors increased 15% from last year.
  • 52% of boards appointed at least one new director; 20% appointed more than one board member.
  • Of the 189 boards disclosing the source of director candidates, 11% reported that the nominees were recommended by shareholders. A decade ago, only 1% of new director recommendations came from shareholders.
  • New directors have an average age of 57.3. The oldest new director is 73; the youngest is 28.

More Than One-Third of New Directors Are Women; 20% Are Minority Executives

  • Female representation among new directors rose to 36% in 2017, the highest rate of female representation since 1998 when we began tracking this data for the S&P 500.
  • 20% are minorities, 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.
  • Eliminating overlap of directors who are both women and minorities, just over 50% of new directors are female or minority directors, up from 42% last year.
  • New female independent directors are more likely than their male counterparts to be line and functional leaders; 23% of women are in line or functional roles, compared with 10% of male directors. Another 16% of female directors are division or subsidiary presidents, versus 5% of male directors. By contrast, male directors are significantly more likely than female directors to be active or retired CEOs, chairs, presidents or COOs: 47% versus 15%.
  • New minority directors are more likely than new non-minority directors to be an active CEO/chair/president/COO/vice chair — 23% versus 16% — and also more likely to have an investor/investment management background — 18% versus 12%.

New Director Snapshot

New Director Snapshot


Video: Board composition highlights


New Director Backgrounds: First-Time Versus Experienced Directors

New Director Backgrounds: First-Time Versus Experienced Directors

A DEEPER LOOK: First-time directors

45% of the incoming class of directors are serving on their first public board
  • Nearly half, 45%, of the new directors are first-time independent directors, serving on their first public company board, up from 32% last year. This is the most since we began tracking the data in 2006.
  • Nearly two-thirds of first-time directors, 64%, are actively employed, compared with 42% of experienced directors.
  • First-time directors are younger, with an average age of 55.2, compared with 57.3 for all new directors.
  • 42% of first-time directors are women, compared to 32% in 2016.
  • 21% of first-time directors are minorities, up from 10% last year.
  • Eliminating overlap, 55% of first-time directors are female or minorities or both, up from 37% last year.
  • First-time directors are more likely than new directors with previous board experience to be current or former division or subsidiary leaders or functional leaders, but less likely to be CEOs, chairs, presidents or chief operating officers.

First-Time Director Snapshot

First-Time and All New Directors

Global Experience Continues to Be in Demand

  • 8% of new independent directors are from outside the U.S.
  • 29% of new directors have global professional experience — defined in this report as having worked at an international location. New directors have working experience in diverse global locations, including Australia, Brazil, Canada, Denmark, Mexico, Singapore and the United Kingdom.

Demand for Financial Executives Grows

  • Demand for financial backgrounds has been growing in recent years; 29% of new directors are active or retired executives with banking, finance, investment or accounting credentials, compared with 25% last year and 19% in 2007. In particular, we are seeing an increase in directors coming from investing and investment management, which account for 13% of new directors, up from 5% a decade ago.
  • 36% of new directors are active or retired CEOs, chairs, presidents and chief operating officers, which represents a slight decline from 38% last year. Ten years ago, 47% of new directors were active or retired executives in these roles.
  • Just over half (53%) of new independent directors are active senior executives and professionals, the same as in 2016. Over the past decade, however, we have seen a decline in the number of actively employed executives taking on outside board appointments; active executives made up 62% of new directors in 2012 and 71% in 2007.

New Independent Director Functional Backgrounds*

New Independent Director Functional Backgrounds

N = 255 men and 142 women in 2017

*Except where noted, all include both active and retired executives.

**All former partners or executives of public accounting firms.

***Includes former government employees, medical executives, a real estate broker, a sports/entertainment agent, among others.

More New Directors Have Tech, Private Equity Backgrounds

  • 19% of new independent directors have backgrounds in the technology or telecommunications industries. Other top industry backgrounds for new independent directors are private equity/investment management, consumer goods and services, and financial services, representing 12%, 11% and 11% of new director backgrounds, respectively. Among new minority directors, 27% have a tech/telecom background versus 18% of new non-minority directors.

New Independent Director Top Industry Backgrounds

New Independent Director Industry Backgrounds