Rethinking Board Evaluation
Board composition provides the foundation of experience and competency that supports all board and committee efforts. The modern era of governance reform began with a focus on recasting the public company board to include more independent outsiders and fewer management directors and persons with close connections to management. Board composition is once again in the spotlight. Investors are increasingly concerned about board quality and refreshment mechanisms in light of long director tenures, rising age limits and perfunctory director renomination decisions. In an environment of expanding business complexity, the relatively slow pace of board turnover may result in board composition that is out of sync with the company’s needs, potentially creating gaps in relevant expertise and knowledge.