Category: Agenda

Risk Committees Triple Since 2010

After the financial crisis, regulators put rules in place for large banks and financial institutions to create a board committee dedicated solely to enterprise risk, rather than continuing to fold this function into the audit committee.

Now, in the midst of a new kind of crisis, boards across industries are considering risk oversight duties, and some could be weighing whether a stand-alone committee is the appropriate option.

Many boards, not just in the financial sector, have added stand-alone risk committees over the past decade. This is true within both the S&P 500 and the Russell 3000. According to Spencer Stuart, 13% of S&P 500 boards now have a risk committee, up from 4% in 2010. Of the 62 boards that had a risk committee in 2020, 42 of those were financial services companies. “On many other boards, the audit committee oversees the risk management functions,” the 2020 Spencer Stuart Board Index states.

And in the Russell 3000, 11% had stand-alone risk committees in 2020, up from 6% a decade ago, according to data from MyLogIQ, a provide of public company intelligence.

What’s Up, Doc? The Number of M.D.s on Boards

The number of physicians on boards shot up in 2020. Some recruiters say this is part of a trend that has been on the rise for the past decade or longer, while others link the jump to the pandemic.

In 2020, there were 578 medical doctors on Russell 3000 boards, up from 484 in 2019 and 438 the year prior, according to data from public company intelligence provider MyLogIQ. Some of those individuals serve on multiple boards, bringing the total number of board positions filled by doctors to 502, 596 and 711 for the past three years, respectively.

“We have seen explosive growth in the number of health care sector companies in the Russell 3000 Index, so it makes sense that we are seeing more director positions occupied by medical doctors,” says Ganesh Rajappan, CEO and founder of MyLogIQ. “It’s too early to determine if Covid is driving a new wave of physician directors. We will have to wait for next year’s reported data to see if there is an uptick.”

Execs Who Jump the Line for a Vaccine Risk Backlash

A well-known SoulCycle instructor was met with backlash after getting the Covid-19 vaccine under the guise of an “educator.”

MTA board member David Mack is reported to have used his influence to help friends get the vaccine at a retirement home in Palm Beach. The unexpected arrival of 200 vaccines reportedly resulted in vaccinations for western Tennessee politicians, hospital executives’ family members and a florist, among others.

Meanwhile, a CEO in Canada chartered a private plane, allegedly breaking isolation requirements and misleading health officials, to get the Moderna vaccine for himself and his wife. The former executive, Rodney Baker, resigned from his role as the CEO of the Great Canadian Gaming Corporation amid the backlash.

…In the S&P 500, the average and median ages of chief executives, meanwhile, hover at around 58 years old, according to data provided to Agenda by MyLogIQ, a provider of public company intelligence.

Corporate Jet Use Taxis for Takeoff in Pandemic

…Who gets to use the jet in a fractional arrangement varies by company, according to filings gathered by public company intelligence provider MyLogIQ. For example, at Sysco, jet use is made available to directors, named executive officers “and other members of management” for business purposes. At DTE Energy, executives and “other employees” are permitted to use the… Continue reading Corporate Jet Use Taxis for Takeoff in Pandemic

C-Suite Interim Roles Stretched During Pandemic

The pandemic has altered how corporate boards view interim roles, with average tenures stretching much longer for certain roles, new research suggests. Going into 2021 with uncertainty still lingering, boards could continue to allow C-suite roles to remain unfilled for longer periods of time.

Tenures among interim execs, such as interim CFOs and other named executive officers in the S&P 500, in 2020 were longer than in the year prior, according to data from public company intelligence provider MyLogIQ.

On average, interim CFOs in 2020 were on the job for 168 days, compared to 97 days in 2019. Interim NEOs were in the position for 188 days, on average, up from 100 days in 2019.

Boards Look to Directors With Reputational Risk Experience

As companies seek to gird their reputations, boards are looking for new directors with deep corporate affairs backgrounds to help them oversee and safeguard an intangible asset that can swiftly erode.

A short list of corporate affairs experts who have ascended to boardrooms in recent years includes Dee Dee Myers, the former Clinton administration White House press secretary who went to Wynn Resorts; AnnaMaria DeSalva, the chairman and CEO of public relations firm Hill+Knowlton Strategies, who serves on the board of XPO Logistics; and Beatriz Perez, Coca-Cola’s chief communications and chief sustainability officer, who joined the board of W.W. Grainger. In fact, at least a dozen S&P 500 companies and New York Stock Exchange-traded companies show director biographies with current or retired corporate affairs experience. That’s according to public company intelligence provider MyLogIQ and SEC filings.

Perk Problems Ensnare Another Company as SEC Clarifies Covid-19 Impact

This week the SEC announced charges against Hilton Worldwide Holdings for failing to disclose approximately $1.7 million worth of perquisites related to personal use of the company’s corporate jet and executive hotel stays. The commission says the hotelier “failed to appropriately apply the SEC’s compensation disclosure rules to its system for identifying, tracking and calculating perquisites.”

This enforcement action and a recently released compliance and disclosure interpretation (CD&I) outlining some pertinent perquisite issues that may come up during the Covid-19 pandemic are signals that the commission is focusing on perk identification and disclosure, sources say. Governance experts suggest that compensation committees take a closer look at perquisite disclosures, particularly surrounding jet use in light of these enforcement actions and travel impacts stemming from the pandemic.

…According to disclosures made in 2020 and analyzed by public company intelligence provider MyLogIQ, only 26 companies specifically disclosed aircraft travel in perquisite calculations.

Uptick in CEOs Retiring to Exec Chair

In the past decade, the number of outgoing CEOs who’ve stepped into executive chair roles has quietly tripled from single digits to two dozen or more. So far this year, there have been 13 such moves, with a few more companies still to file corporate proxies. In 2020, the list includes chair appointments at blue… Continue reading Uptick in CEOs Retiring to Exec Chair