Minnesota Corporate Boards Relying More on Local Talent, Survey Finds; One-Year Terms for Directors Also Increasingly Favored
MINNEAPOLIS, Dec. 12 /PRNewswire/ -- More than half of the new directors who joined the boards of Minnesota's top companies during the past year were based in Minnesota, according to executive search firm Spencer Stuart. The data suggest that active executives with busy schedules may prefer less travel when considering director commitments. This was the first time that a majority of new directors came from Minnesota since Spencer Stuart began tracking Minnesota boards of directors in 1999. According to Spencer Stuart's 2006 Minnesota Board Index, which analyzes the board governance practices at Minnesota's 30 largest public companies, 52 percent or 13 of the 25 new directors were from Minnesota and another four from the Midwest. "The fact is that due to increased workloads, potential board members are being far more selective in the number, types and locations of boards on which they serve," according to Susan Boren, who heads Spencer Stuart's Minneapolis/St. Paul office and also is a member of its Board Services Practice. Spencer Stuart's analysis also found that Minnesota boards increasingly are moving toward one-year terms for directors versus what traditionally have been staggered three-year terms. "One-year terms are indicative of a national trend in which corporations are responding to growing shareholder preference for annual director elections," said Boren. In terms of diversity, Minnesota boards continued significant recruitment of women but saw some decline in minority representation. Women represent 16 percent of directors on Minnesota's top 30 boards, the same as last year and greater than their representation on the S&P 500 boards at 14.8 percent. Among Minnesota companies, General Mills had the highest percentage of women on its board with 31 percent. With regard to minorities, the average minority representation on Minnesota's top boards dropped to 8 percent this year, down from 10 percent over the past three years. More than one-third (37 percent) of the boards surveyed had no minority representation. Other trends identified in corporate governance practices included: -- Eighty-five percent of new independent directors work in a different industry than the board they joined, bringing a fresh perspective to the boardroom. -- Of new directors during the past year, 48 percent were active chairmen, CEOs or chief operating officers of public companies, compared to 43 percent the previous year. Another 20 percent were division presidents or vice chairmen, while 24 percent were retired corporate executives. Companies continue to favor a general management profile when recruiting new directors. -- The average retainer paid to Minnesota directors grew by 15 percent to $50,800. However, this figure is 25 percent less than the average annual retainer reported by S&P 500 boards of $63,594. Ninety percent of Minnesota companies included a stock component as part of director compensation. Forty-one percent chose to enhance the value of the stock compensation by increasing the number of options or raising the overall value of the stock award. The analysis was based on proxy data filed as of September 1, 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
More by this Source
Fortune 500 CFOs Are in Their Roles Longer
Aug 12, 2013, 10:33 ET
Browse our custom packages or build your own to meet your unique communications needs.
Learn about PR Newswire services
Request more information about PR Newswire products and services or call us at (888) 776-0942.