Spencer Stuart’s pulse survey of directors on public and private company boards about board leadership found strong support for the current leadership structure of their boards and mixed views on the differences between independent chairs and lead directors.
Eighty-seven percent (87%) of the more than 1,000 respondents rated their independent board leaders as effective or somewhat effective. The 654 public company directors who responded to the survey rated their leaders higher, with the lion’s share (92%) describing their board leaders as effective or somewhat effective, compared to 81% of the 411 surveyed private company respondents.
Respondents were split on the difference in the roles/responsibilities of independent chairs versus independent lead directors. Just under half (46%) of the surveyed directors (48% public company respondents and 42% private company respondents) see no difference between the roles.
Public and private company directors diverged on the issue of perceived stature of independent chairs versus independent lead directors. Two-thirds (66%) of public company directors compared with 40% of private company directors perceive the independent chair as having more stature.
When it comes to current practices, just over half (53%) of the public company director respondents reported having independent chairs, compared to 42% of the private company director respondents.
Public and private directors were aligned on the prospect of near-term changes to their board’s leadership structure, with 80% of public company directors and 75% of private company directors anticipating no change to their board leadership structure over the next 12-18 months. Of those directors anticipating a change to their leadership structure, board succession planning is the primary motivator. More than one-third of those anticipating a change (41% of public company respondents; 29% of private company respondents) expect the board will switch to an independent chair model.
What is your current form of board leadership?*
|
% Public Co. |
% Private Co. |
% Combined(Pub+Pvt) |
| Independent chair |
52% |
42% |
48% |
| Combined chair/CEO |
29% |
23% |
26% |
| Lead/presiding director |
17% |
9% |
14% |
| Executive Chair (active executive of the company, including former CEO who continues to be an active company executive) |
10% |
13% |
11% |
| Non-independent chair (director who is not considered independent under stock exchange listing requirements) |
9% |
12% |
10% |
| N/A |
5% |
10% |
7% |
* Respondents could select all that apply.
Do you anticipate changing your board leadership structure in the next 12-18 months?
Why do you anticipate changing your board leadership structure?*
|
% Public Co. |
% Private Co. |
% Combined(Pub+Pvt) |
| Succession planning (CEO and/or board leader) |
68% |
48% |
59% |
| Leadership structure optimization |
18% |
39% |
27% |
| Other |
25% |
24% |
24% |
| Investor feedback |
5% |
9% |
7% |
* Respondents could select all that apply.
How do you anticipate changing your board leadership structure?*
|
% Public Co. |
% Private Co. |
% Combined(Pub+Pvt) |
| Moving to independent chair |
41% |
29% |
36% |
| Other |
17% |
35% |
25% |
| Moving to executive chair |
17% |
13% |
15% |
| Moving to combined CEO/chair |
13% |
11% |
12% |
| Moving to lead/presiding director |
10% |
13% |
11% |
| Moving to non-independent chair |
10% |
6% |
8% |
* Respondents could select all that apply.
How different do you perceive the roles/responsibilities of independent chair and independent lead/presiding director?
Do you see a perceived difference in stature between a lead/presiding director and an independent chair?
|
% Public Co. |
% Private Co. |
% Combined(Pub+Pvt) |
| Independent chair is perceived to have more stature |
66% |
40% |
56% |
| No difference in perceived stature |
30% |
38% |
33% |
| Lead/presiding director is perceived to have more stature |
4% |
22% |
11% |
How would you rate the effectiveness of your board’s leadership structure?
|
% Public Co. |
% Private Co. |
% Combined(Pub+Pvt) |
| Effective |
76% |
51% |
66% |
| Somewhat effective |
16% |
30% |
21% |
| Neutral |
5% |
11% |
7% |
| Somewhat ineffective |
4% |
8% |
5% |
| Ineffective |
.5% |
.5% |
.5% |
Data in tables may not total 100%, due to rounding.