Why Boards Matter: Building and Developing a World Class Board of Directors

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Our insights about the market for board talent across S&P 500, the U.S. Tech Industry, and early stage growth companies as well as a cross section of boards interested executives based on the Spencer Stuart Board Index, the U.S. Tech Board Index, and a SurveyMonkey survey put together as input for #WhyBoardsMatter, a joint presentation from Spencer Stuart and Kleiner Perkins. Read the full post here:

Business Leadership & Management

"Why Boards Matter: Building and
Developing a World Class Board of Directors”
James M. Citrin
Leader CEO Practice
Spencer Stuart
1

INTRODUCTION
This presentation was done in connection with the program, “Why Boards
Matter: Building and Developing a World Class Board of Directors,” co-hosted by
Spencer Stuart and Kleiner, Perkins, Caufield and Byers. To set the stage we
reviewed:
• Spencer Stuart’s strategic partnership with Kleiner Perkins
• Our Board Practice’s market leading presence
• Approximately 700 director searches globally
 42 percent of Fortune 100
 One-half of assignments were for companies under $1 billion in revenue
• State-of-the-art governance expertise and thought leadership
2

INPUT FOR THIS PRESENTATION
30 years
SURVEYMONKEY SURVEY
Boards Interested
Executives
42
S&P 500
Board Demographics
Trends
⋆
➲
➚
✓
SPENCER STUART BOARD INDEX
3
SPENCER STUART U.S.
TECHNOLOGY BOARD INDEX
4 years
Top 200 U.S. Tech Companies
Board Demographics
Trends
⋆
➲
➚
✓

52%
48%
1 or more
No new directors
ADDED NEW DIRECTORS IN 2015
S&P 500 AND U.S. TECH BOARD INDEX
S&P 500
5
53%
47%
TECH BOARD INDEX

18%
20%
24%
31%
Retired
CEO/COO
Active
CEO/COO
Financial
Expertise
Women
BACKGROUND
AND
EXPERTISE OF
ADDED BOARD
MEMBERS IN
2015
S&P 500
6

NEW DIRECTOR BACKGROUND WISH LIST
S&P 500
65%
58%
54% 52% 51%
41% 41%
27%
21% 20% 16%
14% 13%
7

8
65%
58%
54%
52% 51%
41% 41%
27%
21% 20%
16%
14%
38%
71%
29%
55%
24%
10%
76%
43%
12% 14%
57%
33%
0%
10%
20%
30%
40%
50%
60%
70%
80%
S&P 500 Boards Interested
S&P 500 NEW DIRECTOR BACKGROUND WISH
LIST COMPARED TO BOARDS INTERESTED
CEOS

SNAPSHOT OF BOARDS INTERESTED
EXECUTIVES
17%
55%
55%
55%
0% 20% 40% 60%
None
NFP
Private
Public
EXPERIENCE INTERESTS/GOALS
17%
31%
60%
64%
0% 20% 40% 60% 80%
Help/Add Value
Experience for new
role
Experience for
existing role
Build portfoilio
9

MARKET CONTEXT:
S&P 500 CEO TRANSITIONS
2004-2015
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Internals Externals Other*
11*Other includes: From Board, Former Executive, Insider-Outsider

68%
59%
Positive TSR
with Board
Experience
Positive TSR
without
Board
Experience
FIRST-TIME CEOS WITH PUBLIC COMPANY
BOARD EXPERIENCE
2012-2015
INTERNAL FIRST-TIME CEOS EXTERNAL FIRST-TIME CEOS
36%
64%
Without Board
Experience
With Board
Experience
47%
53%
Without Board
Experience
With Board
Experience
78%
20%
Positive
TSR with
Board
Experience
Positive
TSR without
Board
Experience
12

MINORITIES AS A PERCENTAGE OF DIRECTORS
TOP-200 BOARDS IN THE S&P 500
76%
9%
8%
5%
2%
All non-minorities
African-American
Non-U.S.
Hispanic/Latino
Asian
14

FEMALE REPRESENTATION ON BOARDS
S&P 500 AND U.S. TECH BOARD INDEX
• In the S&P 500 female and male CEOs have different
board compositions
 28% of directors are women at companies with a female CEO
 19% of directors are women at companies with a male CEO
 Technology company boards with at least one female
director increased from 72% in 2014 to 75% in 2015
 Technology boards significantly trail the S&P 500 in
female representation; 97% of S&P 500 boards have at
least one female director
 Women represent 14% of the total number of directors on technology
boards versus 19.8% of S&P 500 directors
15

"Why Boards Matter: Building and
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