Recent governance guidelines from influential proxy advisory firms Glass Lewis and ISS clearly indicate that the increasing duties of corporate directors make it difficult for them to serve more than five public boards at once. Both proxy advisors have said they will recommend a vote against a director who exceeds this threshold.
According to the Equilar BoardEdge database, there are 113 directors who sit on at least five public company boards—the limit according to Glass Lewis and ISS—and another 515 who sit on at least four.
Discussion around board refreshment and recruiting has centered on the fact that a critical mass of baby boomer directors are reaching retirement age, which is likely to create a number of open positions in the coming years. As multi-boarded directors hit mandatory retirement ages and come off boards in order to meet guidelines, that should open up opportunities for new directors. That said, the majority of directors who are among the ranks of the overboarded are still under the age of 65, according to the Equilar study.
The overboarding issue is a legitimate concern for investors, as the responsibilities of directors increase in context with a more complicated corporate landscape. At the same time, directors are sensitive to the issue, and many are considering or have considered stepping down from at least one board to stay below the threshold. As evidence, the most S&P 500 and Russell 3000 boards that a single director served simultaneously was 10 in 2015, a number that dropped to seven in 2016.
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