According to the ‘Canadian Spencer Stuart Board Index’, there were few surprises in Canadian corporate board governance trends in 2012.
Spencer Stuart has carefully positioned itself as the the ‘premier firm for Board counsel and recruitment’. The ‘Canadian Spencer Stuart Board Index (CSSBI)’ is published annually to report on the Board trends of Canadian companies.Spencer Stuart’s CSSBI 100 is a group of leading Canadian public companies with over $1 billion of revenue, operations in Canada and at least 30% of Directors that are Canadian.
Some of the non-surprises in the 2012 Canadian Board Index include:
- the number of women being appointed to Canadian Boards of Directors continues to grow. Women accounted for 32% of all Board Director appointments in 2012 – a second year consecutive high.
- Despite a fairly significant drop from 2011, Directors with financial backgrounds continue to represent a big chunk of annual director appointments (40%).
- industry experts also continue to make up a large percentage of new Director appointments; for the past six years experts have been appointed once in every two appointments
- a larger majority of Canadian public companies (85%) surveyed by Spencer Stuart continue to separate Board Chair and CEO roles. The number has remained relatively unchanged for five years.
- Every company in the CSSBI 100 evaluated overall Board performance for the third straight year. For two years running every company in the index also evaluated individual Director and Committee performance (Click here to download a copy of the Boardroom Metrics CEO evaluation).
Although there were no huge surprises, some of these findings are interesting – and perhaps a little suprising:
- the survey makes it a little difficult to understand the trend in overall Director compensation. However, it reports that the median annual Director retainer reached $120,000 in 2012, up 9% from 2011 – that’s a decent jump
- total Director compensation in Canada is reported at $154,000. Board Chair compensation is $330,000. Fair or not, compensation at that level risks jeopardizing the impartiality of any Board Chair
- despite increased focus everywhere around corporate risk, few companies have instituted separate, standing risk management committees
Finally, there were some generally comforting elements of the 2012 survey:
- surveyed company Boards met an average of nine times for the year – once more than comparable US firms
- individual attendance at Board meetings was almost perfect!
- full Board evaluations and assessments of individual Directors are three times higher in Canada than in the US
- every CSSBI 100 Company reported some form of continuing education for Directors in 2012
Overall, corporate board governance trends in Canada appear to continue to be moving in very positive directions. The evaluation of individual performance is particularly gratifying. You can download the Boardroom Metrics CEO evaluation here.