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

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