Resources & Reports
This report presents the findings of an analysis of the boards of directors of the 51 publicly-traded companies headquartered in San Diego, California that are in the Russell 3000 index. The data is based on publicly filed information (definitive proxy statements or initial public offering registration statements filed during 2015) for each of the San Diego companies, and was provided by Equilar, Inc.*
|Some of the key findings of the study include:
*This annual report is provided as a Benefit of Membership
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|NEW REPORT: SUCCESSFUL CEO TRANSITIONS CORRELATE WITH MORE ROBUST DISCLOSURE, BUT SUCCESSION PLANNING DISCLOSURE FREQUENTLY IS NON EXISTENT AND OFTEN INCONSISTENT
“The lack of disclosure of a process for CEO succession planning by nearly a quarter of companies is fairly shocking,” said Jon Lukomnik, IRRCi executive director. “Choosing a CEO is one of the core responsibilities of corporate directors. One would think directors would not only want an appropriate succession planning process in place, but also would see the value of disclosing that a process exists.”
Some key findings of the study are as follow:
“Investors know from experience that even well-managed, successful CEO changes are intense and can be distracting, while failed CEO transitions can wreak havoc and cause lasting damage for a company. So it makes sense that investors seek assurance that the board is paying attention and engaged in succession planning,” Lukomnik explained. “No one expects a company to make public a list of CEO candidates. But, some simple disclosures – what board committee has responsibility for the process, how the board gets exposure to potential candidates, and whether or not there is there an emergency plan – could provide that assurance.”
“We were surprised to find so many companies that did not address CEO succession planning at all in their proxy statements,” Barrett said. “When we combine this overall lack of disclosure with the fact that those companies that provide more information about succession plans are more likely to have a successful CEO transition, we can conclude that the calls for increased disclosure are warranted.”
The report presents the results of a study of CEO succession planning disclosures made by the Russell 3000 companies that had a CEO transition during 2012. Data provided by Equilar Inc. was used to identify the 205 Russell 3000 companies that had a CEO transition during 2012 for companies headquartered in the U.S. that had a CEO departure due to a resignation, termination, retirement or medical reason. Not included in the analysis are departures triggered by a merger or acquisition transaction or change in control of any type.
The Investor Responsibility Research Center Institute is a nonprofit research organization that funds academic and practitioner research that enables investors, policymakers and other stakeholders to make data-driven decisions. IRRCi research covers a wide range of topics of interest to investors, is objective, unbiased and disseminated widely. More information is available at www.irrcinstitute.org.
Board Governance Research LLC provides independent research on corporate governance practices, board composition and director demographics. For more information, contact Annalisa Barrett at email@example.com. Follow Board Governance Research on Twitter at @Annalisa_BGR.