Egon Zehnder Report Looks At Capability Gap Among U.S. Company Boards

October 2, 2014 – Corporate boards of leading publicly traded U.S. companies are becoming more global, but the companies still face a capability gap to align their boards with their global aspirations, according to the Egon Zehnder Global Board Index. Even though nearly three-quarters (72 percent) of all S&P 500 companies report some international revenue, corporate boards have achieved minimal progress in globalizing the boardroom over the past five years, according to the report. International revenue now comprises 37 percent of total revenue for S&P 500 companies, an increase of 5.5 percent since 2008, when the first Egon Zehnder Global Board Index was released. But the share of directors who are foreign nationals increased by only 0.6 percentage points in five years, moving to 7.2 percent in 2013. Also, the share of directors with international work experience was 14.1 percent in 2013, up from eight percent in 2008. “Companies with global aspirations need boards with global capabilities,” said George L. Davis Jr., co-leader of the global board practice at Egon Zehnder. “Closing the global capability gap should be a priority for all companies as diversity of ideas and experience in the boardroom will not only benefit their business, but also their shareholders. While companies have made some progress in globalizing the boardroom, there is still significant room for improvement.” The Egon Zehnder Global Board Index tracks and evaluates global capability in the boardrooms of S&P 500 companies and identifies trends relative to board compensation, international work experience and business performance.

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