CorpGov Trends at Largest US Public Companies

2010 Corporate Governance of the Largest US Public Companies General Governance Practices (Shearman & Sterling LLP, pdf) The survey provides a wealth of data concerning board practices at the top 100 companies. A few highlights with a focus on issues of significance to shareowners:

• 82 have implemented some form of majority voting in uncontested director elections, up from 75 last year. In light of the fact that the Reform Act does not include a majority voting requirement with respect to uncontested elections, it is likely that majority voting will receive a great deal of attention during the 2011 proxy season.
• Independent directors constituted 75% or more of the directors on the boards of 88 of the Top 100 Companies surveyed this year. The CEO was the only non-independent director at 59 of the Top 100 Companies.
• Fifteen of the Top 100 Companies have a Chief Risk Officer. In addition, the boards of directors of eight of the Top 100 Companies have a risk committee, and nine of the other Top 100 Companies have a risk committee generally comprised of members of management.
• Separate individuals serve as CEO and chair of the board at 30 of the Top 100 Companies, but of these companies only 11 have adopted an explicit policy of splitting the two offices. The chair is independent at 17 of the 30 companies with a separate chair. All 70 of the Top 100 Companies that have combined the offices of CEO and chair of the board have appointed a lead independent director.
• Of the Top 100 Companies, only six have a Shareholder Rights Plan or “Poison Pill.”
• Of the Top 100 Companies, 20 have a Classified or Staggered Board of Directors.
• Of the Top 100 Companies, 69 disclosed transactions in which the company was a participant and in which a related person had a direct or indirect material interest.

Shareholder proposals for Removal of Supermajority Voting Requirement, Director Elections by Majority Vote and Shareholder Action by Written Consent all had an average level of support of over 50%. Most frequently submitted shareowner proposals:

• Independent Board Chair
• Two Nominees for Each Director Position
• Cumulative Voting for Directors
• Annual Election of Directors
• Redemption of, or Shareholder Vote on, Poison Pill
• Director Elections by Majority Vote
• Removal of Supermajority Voting Requirement
• One Vote Per Share
• Certain Shareholders Can Call Special Meetings
• Reincorporate in North Dakota
• Shareholder Action by Written Consent
• Succession Policy