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
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
-- 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