Governance, Socially Responsible Investing & DEI Take Center Stage in the Board Room

ARMONK, N.Y., Feb. 9, 2022 /PRNewswire-PRWeb/ -- While setting company strategy and providing oversight are still the primary responsibilities of Boards of Directors, major structural and policy evolution are increasingly evident in the form of governance and accountability, sustainability and diversity, equity and inclusion, according to the recently released 2022 Total Compensation Solutions (TCS) Board of Directors Report.

The 16th annual edition of the TCS Board of Directors Compensation Report, provides in-depth analytics on compensation, incorporating proxy data from 2,283 public companies across 12 industry sectors, representing revenue groups from $50 million to over $1 Billion. The report also provides industry breakdowns (i.e., insurance, energy, health care, media, telecommunications, banking, etc.) and geographical breakdowns to reflect regional economies.

Recent Findings on Structure include Service Tenure, Diversity & Gender Equity Compliance, and Sustainability Standards.

The recently released 2022 TCS report, collected data on several key elements of Board structure including number of directors, number of meetings, average tenure and types of standing committees. Findings include:

• The majority of Board members, seventy-eight (78%), are male.
• Nearly one-third (34.5%) of Directors have less than 5 years of service. The Banking industry has the highest percentage of Directors with 20 years of service (19.2%), while the Biotechnology industry has the lowest percentage with 20 years of service (3.6%).
• Thirty-seven percent (37%) of the companies in the study have a Lead Director. This percentage increased by 5% from last year.
• Forty-five percent (45%) of the companies in the study have a Board Chair who is also their CEO. This remains the same as last year's survey.
• The average age of directors reported by all companies is sixty-two (62).

Climate Change, Sustainability Standards Led by New BOD Environmental Committees

The growth of socially conscious investing has led to increased support for companies with an environmental sustainability and clean energy or clean technology strategy. Much of this support derives from a push by large institutional investors for more precise and clear disclosure surrounding climate change and the SEC created Climate and ESG task force. The role of the task force is to investigate company disclosure as it pertains to climate risk and sustainability. To address these environmental issues, TCS observes a growing number of companies are adding an Environmental Committee to the Board of Directors.

DEI Reframes Proxy Agencies Voting Policies Nationally, By State: California's Most Notable

Proxy advisory firms have updated their policies on board diversity for 2022, to include withholding votes if companies fail to expand both ethnic and gender diversity. In addition, individual states have been implementing new laws to address minority representation on Board of Directors. One example of this is a new law set to take effect in California in 2022 states that companies with four or fewer directors have at least one minority member, companies with five to eight directors have at least two minority members, and companies nine or more directors have at least three minority members. Companies can comply with this new law, by adding more board members rather than removing board members currently serving.

The 2022 Board of Directors Compensation Report, a leading source of Board compensation trends, also reveals data on other Board room issues, including board compensation, governance and function, sustainability and societal shifts (ESG), and Diversity Equity and Inclusion (DEI), among over 2,200 public companies in diverse industry sectors, geographical regions, and revenue size groups.

Media Contact

Thomas Bailey, Total Compensation Solutions, +1 (914) 255-8725, [email protected]

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SOURCE Total Compensation Solutions