(New York, NY) The 2023 U.S. Spencer Stuart Board Index reveals that S&P 500 boardrooms are placing a higher priority on CEO experience and financial expertise when making appointments. After a period of decline, the number of active and retired executives with CEO experience appointed to boards has returned to 2018 levels. Additionally, the recruitment of retired or active CEOs has increased to 30%, compared to 23% last year. Boards are also appointing more directors with financial backgrounds, accounting for 27% of new appointments, up from 23% last year. This marks a shift from the previous trend of appointing functional and P&L leaders.
Sixty-seven percent of new independent directors and 48% of all S&P 500 directors are diverse. The representation of women on S&P 500 boards is on the rise, with 46% of new directors being women. This marks a significant 92% increase over the past decade. Currently, women represent 33% of all S&P 500 directors, the highest ever recorded. This represents a one-percentage point increase from last year and an 83% increase over the past 10 years. Furthermore, there is an increase in new directors with international experience, indicating a growing global outlook among S&P 500 boards. In 2023, 54% of new independent directors have worked at an international location, a four-point increase from the previous year.
Boards are also utilizing mandatory retirement as a means of refreshing their composition. Approximately 69% of S&P 500 boards have a mandatory retirement age for directors, with more than half setting the age cap at 75 or older. Interestingly, over half of directors leaving S&P 500 boards in the past year were three or fewer years away from mandatory retirement age. The average age of new directors has increased slightly to 58 years, compared to 57.3 years in previous years. However, there has been a decline in the percentages of next-generation (age 50 or younger) and first-time directors.
SOURCE Spencer Stuart