Governance Center Blog

Apr
12
2012

CEO Succession: The Facts

Today, The Conference Board published The CEO Succession Report, which examines CEO succession events at S&P 500 companies for 2001-2011. The report was authored by Jason D. Schloetzer, Matteo Tonello and Melissa Aguilar. Key findings include:

  • 2011 CEO succession rate was 10.8 percent. This rate was consistent with the average number of annual succession announcements from 2000 through 2010.
  • CEO succession more likely to follow poor company performance. The study found that the probability of CEO succession is higher following poor company performance than when performance has been strong. In the 2000–2011 period, the succession rate among CEOs of poorly performing companies averaged 14 percent, compared with 10 percent for higher performing companies. Read the rest of this entry »

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Jan
18
2012

Governance Challenges and Priorities for 2012

What are the biggest corporate governance challenges and issues for 2012?  I spoke with a number of investors and other governance experts, and here’s what they said:

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Nov
08
2011

Annual Survey Reveals Emergence of New Compensation Practices

This week, The Conference Board issued its The 2011 U.S. Director Compensation and Board Practices Report. The report is based on a survey of 334 public companies jointly conducted by The Conference Board, NASDAQ OMX, and NYSE Euronext between April and June 2011. The Harvard Law School Forum on Corporate Governance and Financial Regulation, Stanford University’s Rock Center for Corporate Governance, the National Investor Relations Institute (NIRI) and the Shareholder Forum each endorsed the survey by distributing it to their members and readers. Participants in the survey (corporate secretaries, general counsel, and investor relations officers) were asked to provide information on a wide range of corporate practices, including: board composition and leadership, director election practices, anti-takeover practices, compensation practices, risk oversight practices, CEO succession planning practices, board-shareholder engagement practices, and policies on director performance assessment and retirement. Findings constitute the basis for a benchmarking tool with more than 120 data points searchable by company size (measurable by revenue and asset value) and 20 industrial sectors. Read the rest of this entry »

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Oct
14
2011

Sustainability Matters: For Directors, it’s all in the Framework

If there is one message that comes across loud and clear from the newly released Sustainability Matters: Why and How Corporate Boards Should Become Involved from The Conference Board, it is that U.S. corporate directors still lack a framework for overseeing sustainability programs.

But that’s not due to the lack of recognized frameworks. Rather, it’s more about a general misunderstanding of sustainability and how it needs to be integrated into companies’ strategic plans in order to glean the long-term shareholder value it can produce. That is evidenced by the current myth that sustainability is closely associated with climate change and that any work in that area is a complete waste of time. Read the rest of this entry »

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Sep
02
2011

Despite the Controversy, Jobs Succession Plan at Apple may be Model for Others

The resignation of Apple CEO Steve Jobs and his succession to Chair raises a couple of issues for all public companies regarding the creation and implementation of a succession plan. While it was no surprise that Jobs, who has been fighting a long-term illness for years, stepped down when he did, the whole process is one that almost everyone in the corporate governance space has had their collective eye on.

The interest in the situation at Apple isn’t so much centered around the controversy over whether the board should have disclosed the news of Jobs health

Steve Jobs, Chair of Apple

Steve Jobs, Chair of Apple

and the company’s succession plan, but how a company with so much success due to one person can remain on top as it gives the reins to a new leader. Read the rest of this entry »

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May
24
2011

NASDAQ, NYSE Team Up with The Conference Board on Board Practice Survey

The Conference Board, NASDAQ OMX and NYSE Euronext recently announced a research collaboration to examine the state of corporate governance practices among publicly listed corporations in the United States.

The collaboration focuses on the development and dissemination of information regarding the structure, composition and functions of the board of directors. As part of the collaboration, The Conference Board is conducting an online survey of general counsel members, corporate secretaries and corporate government specialists at publicly listed U.S. companies. If you interested in taking the 2011 Board Practice Survey, please contact Matteo Tonello, research director of corporate leadership at The Conference Board at matteo.tonello@conference-board.org.

Findings will constitute the basis for a benchmarking tool searchable by company size (measured by revenue and asset value) and 22 industry sectors. Data will also be analyzed in the next edition of The Directors’ Compensation and Board Practices Report, which The Conference Board, NASDAQ OMX and NYSE Euronext will release jointly in the fall. The report has been published by The Conference Board since 1939. For more information on the report, click here.

“We are proud to join forces with NASDAQ OMX and NYSE Euronext in consolidating a source of information that we believe our respective members will find of great value when facing decisions regarding their corporate governance structure and fiduciary responsibilities,” Tonello said.

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May
19
2011

Accounting Firms Finding Sustainability Program Growth in U.S.

Three years have definitely made a difference in the world of corporate sustainability programs, according to a recent study by KPMG. Combined with some video briefings from PwC, it is easy to see that U.S. companies are getting more acclimated to integrating a sustainability strategy into their overall corporate strategies.

The KPMG Corporate Sustainability: a progress report, which was released in connection with the launch of the accounting and advisory firm’s Global Center of Excellence in Climate Change & Sustainability last month, found that nearly 55 percent of U.S. executives report their organization has a formal sustainability strategy in place. While that is still not as much as their global counterparts [62 percent], U.S. companies have closed the gap. According to the survey, some of the leaders in sustainability strategy and reporting are Procter & Gamble, Anheuser-Busch, InBev and UPS. Read the rest of this entry »

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May
05
2011

Survey from The Conference Board: Manufacturing Leading Donor to Japan Relief Effort

The U.S. manufacturing industry is the leading donor for aid among U.S. listed companies to earthquake-ravaged Japan with an average of $807,555 per company, according to an online survey conducted by The Conference Board.

Nearly two months after the earthquake and tsunamis, almost all of the largest companies surveyed ($20 billion or more in annual revenue) have established some form of relief effort in Japan. Of the smallest companies (less than $5 billion in annual revenue), about 74 percent had set up a program. By industry, about 95 percent of manufacturing companies had set up relief programs compared to about 88 percent in financial services and about 80 percent in other non-financial services. Read the rest of this entry »

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Feb
18
2011

Is CSR Finally Getting its Due in the Boardroom?

There is an acronym that has finally bubbled up to the boardroom: CSR, as in corporate social responsibility. And one of the reasons it is finally being taken seriously, or getting past the lip service phase, is that companies are discovering there is some real value behind CSR activities.

A recent Director Notes report issued by The Conference Board Governance Center (Investing in CSR to Enhance Customer Value, February 2011) determined that CSR activities have the potential to create several distinct forms of value for customers. The report, co-authored by John Peloza, a professor with Simon Fraser University in Vancouver, Canada, and Jingzhi Shang, a Ph.D. candidate at the school, includes a review of 163 articles about the relationship between CSR activities and financial performance. Read the rest of this entry »

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Nov
23
2010

Report: Institutional Investors Owning More of Larger Companies

Institutional investors came back to the securities markets in droves in 2009 after fleeing during the financial crisis of 2007-2008, according to The 2010 Institutional Investment Report released by The Conference Board earlier this month. A tell-tale sign of the trend was the increased institutional ownership concentration in the 1,000 largest U.S. corporations.

As markets rallied in 2009, ownership concentration by institutional investors continued to expand in all but the 50 largest U.S. corporations, the 64-page report stated. Co-authored by Matteo Tonello, director of corporate governance research for The Conference Board, and Stephan Rabimov, an economist who has co-authored the report since 2004, the report showed that institutional investors owned 73 percent of the top 1,000 companies in 2009 compared to 69 percent in 2008. It is noteworthy that the bracket group consisting of the 50 largest companies in terms of market capitalization is the one for which institutional investors reported the only setback in 2009 (when average ownership concentration was reduced from 64.5 percent to 63.7 percent). Read the rest of this entry »

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