June 10, 2020

Survey: Board Evaluations

We’ve wrapped up our latest survey on practices relating to board evaluations.  Here are the results:

1. When is your company’s board evaluation typically conducted:
– During the fiscal year in which board performance is evaluated – 48%
– Following the fiscal year, but before the proxy statement is filed – 48%
– Between the filing of the proxy statement and the annual meeting of shareholders – 2%
– We do not perform annual board evaluations – 2%

2. In conducting board evaluations, some boards use written questionnaires and some use oral interviews (or both).  At our company, we use:
– Written questionnaires only – 39%
– Oral interviews only – 29%
– Both written questionnaires and oral interviews – 32%

3. If written questionnaires are used in the board evaluation process, are copies retained:
– Yes – 39%
– No – 61%

4. Who manages the board evaluation process:
– Non-executive board chair or lead director – 11%
– Chair of governance/nominating committee – 25%
– All members of the governance/nominating committee – 7%
– General counsel/other in-house counsel – 34%
– Outside counsel/consultant – 21%
– CEO – 0%
– Other – 2%

5. Is a written report produced based upon the results of the board evaluation:
– Yes – 51%
– No – 49%

6. How do the minutes reflect the board evaluation results:
– Brief summary of results, without including conclusions – 41%
– Brief summary of results, including conclusions – 16%
– In-depth detail of results – 0%
– Minutes do not reflect results – 43%

Please take a moment to participate anonymously in these surveys:


Insider Trading Policies – COVID-19 Adjustments

Compliance Programs: DOJ Updates Evaluation Guidance

Last week, the DOJ issued updated guidance on Evaluation of Corporate Compliance Programs.  The updated guidance gives some insight into the DOJ’s expectations for corporate compliance programs and it can be used as a guide when reviewing and updating a company’s compliance program.  We’re posting memos on the latest guidance in our “White Collar Crime” Practice Area.

Benchmarking Compliance Reporting

For those taking on responsibility for reviewing a company’s compliance program, along with using the DOJ’s updated guidance, NAVEX Global recently issued its Risk & Compliance Hotline Benchmark Report – providing another resource to help see how a company’s risk and compliance program stacks up. The report includes data gathered from over 3,200 of NAVEX’s customers and looks at data using median or midpoint rather than averages to reduce impact from outliers.  It’s a 60-page report so it’s chalk full of data, here’s some high-level data points:

– Median hotline/incident reports per 100 employees remained steady at 1.4 – but 19% received 5 or more reports per 100 employees

– Case closure time increased from 40 to 45 days, a 13% increase – the report says best practice average case closure time should be 30-32 days – about 20% of customers take 100 days or more to close cases

– Extended time to close cases may indicate organizations aren’t prioritizing reports or they may not have enough resources to resolve them – the report advises companies to address both potential issues to boost credibility of the compliance program

– Analysis showed that 31% of reporters speak up in 9 days or less after an incident occurs – but 20% of reports come in 60 days or more after an incident occurs

– Delays in reporting incidents could be due to fear of retaliation, lack of awareness or availability of reporting systems and the report advises companies to identify possible causes because delays make it more difficult to close an investigation

– Lynn Jokela