The August Employee Ownership Report featured an overview of the results, including on board size and composition, and on trustees and their compensation. Below we highlight findings on policies related to corporate governance that were explored in the survey.
We asked a new question this year about how ESOPs use services to help in their governance practices. Among the choices offered, financial reviews and valuations are most highly valued in this context.
For most respondents, the board itself nominates candidates either as a whole (45%) or among a nominating committee (27%). Just a few respondents (5%) say ESOP participants fill this role. For the most part, respondent companies do not have term limits: 71% have none, while 11% limit terms to one to two years, and 18% have terms of three or more years. Most respondents do not have any current vacancies on their board (76%).
When it comes to selecting their independent directors, 75% of respondents have at least one. With regard to selecting independent directors, respondents value specific knowledge much more highly than experience serving on other boards. Thinking about their board meetings going forward, 75% of respondents intend to go back to the general schedule they had before the pandemic, 23% will have more virtual meetings than before it, and no respondents thought they would no longer have any in-person board meetings.
The full survey report available here includes detailed compensation percentiles for boards and trustees, broken out by director type, form of compensation (retainer, per-meeting fee, equity), and company demographics. We thank the respondents to the survey who make our work on best practices possible.