Independent directors have become the norm at major U.S. companies, thanks in large part to the reform efforts of large institutional investors, according to a study of 421 large firms by the Investor Responsibility Research Center, Washington.
A majority of the boardroom is now in the hands of independent directors, and fully independent compensation and nominating committees also have become the norm at the companies, the report said.
In other findings, only 14.3% of companies separate the offices of chairman and chief executive - an idea embraced by many institutions - and only few have a truly independent chairman.
Approximately 88% of boards surveyed had at least one female member, but minorities do not appear to have fared as well. In the survey, 45% of companies indicated at least one minority director sat on their board. Approximately 37.5% did not disclose adequate information to determine the ethnic or racial status of board members.
While more than 60% of firms provide their non-employee directors with some form of pension upon retirement, the percentage continues to drop.
In 1995, Alexander & Alexander Inc., Armco Inc., Nicor Inc. and Scott Paper Co. discontinued the controversial practice.