The study attributes the increase to the increased liability of, and expectation from, those serving on corporate boards.
The US boards were found to be most likely, 87%, to hold meetings without the CEO present, while the Japanese were least likely, only 4% of board there convene without the CEO. The study found that 92% of Australia/New Zealand directors, 80% of American directors and 71% of French directors think the former CEO should not be able to sit on the board. The area most likely to conduct formal evaluations of directors was the Asia Pacific where 41% of boards report evaluations and 29% of US boards conducted the evaluations, an increase of 8% over the previous year.
Compliance was a big issue among directors, almost all of the American boards, 98%, are in compliance with Sarbanes-Oxley, 63% of French boards said they were in compliance with the Bouton Report while 66% of UK boards reported they satisfied the Higgs and Smith Reports on the issues of director independence.
Fortune 1000 boards have increasing diversity, according to the findings. On 79% of the companies, women hold at least one seat, while 71% of boards have at least one seat occupied by an African-American, Latino or Asian director.
An evaluation of compensation among global directors found that the average compensation for a board of directors member was $43,306 in 2002, an increase of 3.4% over the 2001 compensation, and the increase in the Audit Committee chairmen retainer was 8.4%, up to $5,779. Additionally, 784 of the 906 Fortune 1000 companies include stock options and grants in their director compensation package. Most American directors (81%) say their company’s CEO compensation program is effective compared to 65% in Germany and 53% in Non-Japan Asia.
The Korn/Ferry International’s 30th Annual Board of Directors Study gathered responses from 1,362 directors of Fortune 1000 companies and leading organizations from 15 nations. More information is available at http://kornferry.com/Library/Process.asp?P=PR_Detail&CID=543&LID=1 .
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