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
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
-- 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