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Governance

Corporate boards casting wider net when seeking new directors – report

Corporate boards appear to be casting wider nets when seeking new directors, said a report from Ernst & Young's Center for Board Matters.

The report, which analyzed independent directors elected to Fortune 100 boards by shareholders in 2018, revealed that 71% of Fortune 100 companies added at least one new nominee, while 27% added two or more. This represents an increase from previous years when the levels were steady at about 56% and 21%, respectively.

"Boards are thinking differently about what makes an effective board candidate, and the supply of possible candidates is expanding significantly," the report said. "This larger pool means boards can be even more selective about their shortlists."

Women continue to represent roughly 40% of new nominees.

The average age of new directors has been getting younger each year, the report said. The portion of new nominees under age 60 grew to 58% in 2018, from 51% in 2016. Meanwhile, the portion of those under 50 grew to 14% from 8%.

The report also showed that one-quarter of the new directors were recognized for their experience in innovation, transformation and in navigating change.

The report's findings are based on reviewing the corporate disclosures of the same 83 companies from prior years.