Illinois Boardrooms Shifting Significantly
Increased Workload, Strong Demand for Independent Directors Create More
First-time Directors, Diversity
CHICAGO, Nov. 29 /PRNewswire/ -- Illinois boards are shifting significantly as increased workloads, active CEOs serving on fewer outside boards and high demand for quality independent directors create opportunities for more first-time directors, according to executive search firm Spencer Stuart. Analysis of the boards of Illinois' 34 companies in the S&P 500 found that in Illinois only 35 percent of new directors were active CEOs. Nationally, only 29 percent of new directors were CEOs, down from 47 percent in 2001. The data partly reflects the fact that the CEOs are serving on fewer boards than in the past because of increased responsibility and workloads. In Illinois, CEOs sit on average on one outside board compared to 0.8 on average nationally. The national figure has declined from an average of two outside boards in 1998. Of new directors in Illinois in the past year, 14 percent were serving as directors of a public company for the first time, compared to 31 percent nationally. Twenty-four percent of new directors in Illinois were women, compared with 23 percent nationally. "What we are seeing is CEOs limiting their outside board work to one board at most," said Tom Snyder, head of Spencer Stuart's Midwestern region and a member of Spencer Stuart's Board Services Practice. "At the same time, with the increased demand for independent directors, the CEO gap is increasingly being filled with retired CEOs and active executives the next level down, such as such as division and subsidiary presidents leading to greater board diversity," he said. The increased workload and demand for able independent directors has been reflected in increased director pay as well. Board retainers for major Illinois companies have grown by more than 36 percent in the past two years to an average of $69,200 versus $50,848 in 2004. The $69,200 for the 33 Illinois companies in the S&P 500 compares with a $63,600 retainer for the S&P 500 nationally, which also has seen significant increases. Eighteen of the 33 Illinois companies also paid meeting fees for board meetings, bringing average pay, minus deferred compensation, to an average $75,032 for Illinois board members. "With the falloff in available CEOs to sit on boards, boards are increasingly actively seeking specific and complementary skill sets and diversity to create in what in many cases are better boards," said Bob Heidrick, a member of Spencer Stuart's Board Services Practice in Chicago. Among the other findings: -- Illinois boards average 11 members in size with approximately nine of those members being independent directors, similar to the national average. -- 94 percent of Illinois boards now have a lead or presiding director compared to 96 percent nationally. Following the passage of Sarbanes- Oxley, the national percentage has grown from only 36 percent of boards which had such directors in 2003. -- The average Illinois board meets eight times per year. This roughly mirrors national averages, but doesn't reflect the additional work that has been undertaken by individual committees following Sarbanes- Oxley. For instance, Spencer Stuart found that nationally 37 percent of all audit committees meet 11 times or more throughout the year, up from just one percent that met that often in 2001. The analysis was based on proxy data filed as of June 30, 2006. About Spencer Stuart Spencer Stuart is one of the world's leading executive search consulting firms. Privately held since 1956, Spencer Stuart applies its extensive knowledge of industries, functions and talent to advise select clients -- ranging from major multinationals to emerging companies to nonprofit organizations -- and address their leadership requirements. Through 50 offices in more than 25 countries and a broad range of practice groups, Spencer Stuart consultants focus on senior-level executive search, board director appointments, succession planning and in-depth senior executive management assessments. For more information on Spencer Stuart, please visit http://www.spencerstuart.com .
SOURCE Spencer Stuart
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