Board Refreshment, Boardroom Culture, and Director Performance

Focus on board composition and director performance has never been greater. With rule proposals and listing standards requiring disclosure of board diversity and expertise in climate and cybersecurity, the rise of activist investors and the universal proxy, the complexity of operating in a global marketplace, and increasing attention to directorial independence, corporations are under increasing pressure to assemble a board with the right mix of experience, specialized skills, industry-specific expertise, international exposure, and gender, racial, ethnic, and age diversity. Many shareholder advisory firms and institutional investors argue that director tenure should be scrutinized more heavily, with some advocating term limits or mandatory retirement ages to refresh boards with entrenched directors or stale skill sets, and to accelerate the turnover of board seats. In addition, uncertainty can abound as to whether and when directors qualify as independent, and new procedures may be necessary to address that uncertainty. Taken together, these pressures can force nominating and governance committees to reconsider the process by which they assess board composition, identify board candidates, onboard new directors, and evaluate individual director performance and board dynamics. This session will discuss successful strategies for ensuring that companies are building and developing the best performing board of directors given the company’s current and projected needs while discussing ways that individual directors can maximize their own contributions in the boardroom.