”The importance of board composition, director succession planning, board evaluation processes, and director skillsets has been a common theme in NACD’s multi-stakeholder dialogues across 2014, and investors emphasized these issues will continue to be top-of-mind in 2015. Several investors noted that “observable components such as director tenure and backgrounds are neither inherently good nor bad, but they help investors get a picture of what’s important to the board and the company.” Evidence that boards are taking a strategic approach to director succession planning is of critical importance to investors: “At companies where one-third or even half of the board will be at retirement age in the next three to five years, what’s the plan? Will there be a staggered replacement or a wholesale change? We believe tenure has value, and continuity is important, so it’s very valuable to investors to understand how boards will be approaching this issue proactively.”
