Korn Ferry Board Survey Finds Dramatic Age Shift In New Directors
LOS ANGELES, October 4, 2015 — Korn Ferry (NYSE:KFY), the preeminent global people and organizational advisory firm, today released its annual Korn Ferry Market Cap100 (KFMC100), a study of board practices at the largest US companies by market capitalization, entitled “The Class of 2014.”
KFMC 2015 key findings for the Class of 2014, or directors newly added to boards, include:
- Age – 17% of new directors are 65 and older, while 16% are 49 or younger. On boards as a whole, including both new and incumbent directors, 51% of directors are 65 and older, while 4% are 49 or younger.
- Functional/industry background – The most sought-after new directors have a finance/audit background (50%), followed by same industry experience (47%), COO/Operations (32%), and Marketing/Sales (31%).
- Diversity – 20% of new directors are women; 9% are African American; 3% are Asian American; and 0% are Hispanic American.
- Global experience – 35% of new directors have international work experience, and 21% were born and/or educated abroad.
“The analysis points to efforts by the largest companies in America to add next-generation directors who bring the fresh ideas and insights that are crucial in a rapidly changing business environment,” says Korn Ferry Vice Chairman Dennis Carey. “Of particular interest, nearly one in six new directors is 49 or younger.”
The report tracks data not only on newly added directors but incumbent directors, noting that 55% of directors have held their board seats for nine years or more.
In addition to the statistical portion of the KFMC100, which is based on an analysis of proxy information and other publicly available data, the report features an interview with corporate governance expert Martin Lipton, co-founder of law firm Wachtell, Lipton, Rosen & Katz, who shares his views on gaining crucial new expertise on boards, board leadership, and the danger of what he refers to as “short-termism.” A “Hall of Fame” section of the report features three prominent contributors to corporate governance: Bonnie Hill, who recently stepped down as the long-time lead director of Home Depot; Irv Hockaday, current lead director of The Estee Lauder Companies and former lead director of Ford Motor Company; and Jack Krol, former chairman of Delphi Automotive PLC and Pacolet-Milliken, and former lead director of MeadWestvaco and Tyco International. The three veteran board leaders discuss what it takes to build a strong board team and work effectively with the CEO.
Each year the Korn Ferry Market Cap100 (KFMC100), examines current board practices, as well as characteristics of newly added directors in US companies with the largest market capitalization. Because this group of companies represents leaders in their sectors that regularly demonstrate outstanding results, and the list changes little year to year, the assumption is that they have adopted successful practices that might be extended to other companies.
To download the complete KFMC100 report, please click here: kornferry.com/institute/KFMC100-2015
About Korn Ferry’s Board Practice
Korn Ferry’s Board Practice comprises an elite group of senior consultants who have recruited directors for more than 150 of the largest companies in America. Our work encompasses recruiting entire boards for spin-off companies, emerging companies and IPOs, private firms, and those emerging from bankruptcy. We maintain a steady focus on meeting the diverse specification criteria we are charged to recruit as well as ensuring the culture and team fit with other directors that is essential to board effectiveness.
About Korn Ferry
Korn Ferry is the preeminent global people and organizational advisory firm. We help leaders, organizations, and societies succeed by releasing the full power and potential of people. Our nearly 7,000 colleagues deliver services through our Executive Search, Hay Group and Futurestep divisions.
Vice Chairman, Co-Leader, Board Services Practice