New Study on Corporate Governance: America's Largest Public Companies Ranked by Board Strength - Fewer Active CEOs Serving on Boards, Share of Board Seats Held by Women and Minorities Increases
Top-10 Strongest Corporate Boards Revealed; Pressure Mounts as Boards Face New Challenges, Shifting Priorities, and a Marked Decline in Business Acumen
CHICAGO, Sept. 5, 2023 /PRNewswire/ -- PPG Industries, Teradyne, and International Paper outperformed all other public corporations in the U.S. in terms of board governance capacity, according to a study by JamesDruryPartners. In its newest edition of The Weight of America's Boards, the firm measured the "Average Director Weight" (objective standard for assessing relative board strength) of America's largest publicly traded companies (based on revenue and market cap). Since 2011, the board of PPG (NYSE: PPG) has appeared on the study's top-ten list seven times and has ranked #1 twice, most recently in 2016.
This year, the study carefully evaluated the business acumen of every director serving on more than 600 public boards. A complete ranking of the corporations can be found in the full report: The Weight of America's Boards (2023)
Top-10 Corporations with the Highest Average Director Weight:
- PPG Industries
- Teradyne
- International Paper
- Waste Management
- Elevance Health (Formerly Anthem)
- Baker Hughes
- Regions Financial
- Walt Disney
- Uber Technologies
- Yum! Brands
"The Weight of America's Boards provides a thoughtful benchmark by which the integrity of a board's governance system can be measured," said the report's lead author, Jim Drury (CEO of JamesDruryPartners). "It is an honor to provide the unique insights contained in the study. For more than a decade, boards have used its findings to facilitate boardroom discussion, and we anticipate that the actionable insights in this edition will help them to further strengthen their governance capacity."
Other Key Findings: 47% of the 6,525 board seats analyzed in the report were held by gender and/or ethnically diverse directors. Female directors make up nearly a third of today's public boards, which outpaces their presence in the C-suite by almost 7%. According to the report, 32.7% of board directors are female, compared to a recent McKinsey/LeanIn.org study which indicated 26% of C-level executives to be women. In addition, board seats held by non-white directors were shown to have more than doubled since 2011, the first year The Weight of America's Boards was published.
Current Challenges: Geopolitical and macroeconomic instability, increased regulatory oversight, ESG compliance, rapid technological advancement, cyber risk, and a complex global business environment are among the leading issues corporate boards are facing today. In addition, public skepticism towards corporate boards and unfounded criticism from shareholder activists continues to grow.
Concerning Trends: For the first time in the history of the study, Average Director Weight declined among the boards examined. ADW fell 3.5% since the last report was issued, an indicator of decreased business acumen in corporate boardrooms. The number of active CEOs serving on outside boards continued to trend downward, driving this alarming decline. The report also noted that, of the 6,525 board seats analyzed, only 100 seats were filled by outside active CFOs. Together, these trends indicate that some boards are lacking the financial and business leadership expertise needed to deal with the complex, ever-evolving challenges facing boards today.
CEO Drury attests, "We are more convinced than ever that strong governance capacity is the high-octane fuel in a corporation's engine. It is the able leadership of the board Chairperson and committee heads that catalyzes this precious fuel in a manner that fosters governance strength, quality, and effectiveness."
About JamesDruryPartners (www.jdrurypartners.com) – Following an earlier career in management consulting and executive search, Jim Drury founded JamesDruryPartners to advise boards in the selection of new CEOs and board directors. While advising some of the highest profile companies in the U.S., he soon recognized that boards were experiencing a "brain drain" as CEOs began to reduce their outside board commitments. The firm expanded its offerings as a result, developing new services focused on maintaining the strength of corporate boards. In addition to director recruitment, the firm launched its most innovative service, BoardSelect®: optimizing the matching process of America's top executives with the boards that could most benefit from their service, while also providing a governance experience most beneficial to the companies they lead.
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SOURCE James Drury Partners
