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According to the latest Spencer Stuart Board Index, financial types & techies top the “Most Wanted List” when it comes to skills desired in new directors on S&P 500 boards. Here some of the highlights when it comes to new director demographics:

– Only 36% of the new S&P 500 directors are active or retired CEOs,board chairs or vice chairs, presidents or COOs. That’s down from 47% a decade ago.

– Board experience is also no longer a prerequisite. One-third of the incoming class are serving on their first public company board.

– Directors with financial backgrounds are a priority, representing 25.5% of the new S&P 500 directors in 2018, up from 18% in 2008.

– 40% of the members of the incoming director class are female, 10% are minority males, and 17% are under 50.

– Of the directors under 50, one-third have tech or telecommunications backgrounds.

The index covers a lot of ground, and includes information about board size ranges, director tenure, board governance practices, director compensation and 1, 5 & 10-year trends in board composition.

Board Composition: Low Turnover Hinders Diversity Push

Spencer Stuart says that the S&P 500 appointed appointed 428 new independent directors in the 2018 proxy year. Although that’s up 8% over the prior year, overall turnover is low, with new directors representing just 8% of all board seats.

While 50% of those new seats went to women or minority men, this WSJ article notes that the low turnover rate slows efforts to promote diversity. It also provides some insight into one reason why turnover may be so low:

“Boards are a little more static than they should be in a world that’s so dynamic,” said Julie Daum, head of Spencer Stuart’s North American board practice. That means there are few opportunities for women and people of color to join boards.

One reason for the low turnover: Directors have been voting to raise their own mandatory retirement ages. Of the S&P 500 companies that have such policies, around 44% set the age at 75 or older, compared with 11% in 2008. Of all S&P 500 companies, 71% disclose a mandatory retirement age.

The article says that the shift to later retirement ages emerged during the financial crisis, when companies were seeking to maximize stability by retaining experienced directors.

Shareholder Engagement: “Top of Mind” Issues for Investors

Interest in off-season engagement with investors is reportedly very high this year. If your company is one of those preparing for a round of shareholder engagement, you should check out D.F. King’s 20-page “Fall Engagement Guide,” which provides a brief overview of the issues that are currently “top of mind” among institutional investors. It’s the perfect type of document to slide across the boardroom table to your CEO or CFO – and to share with your directors.

– John Jenkins