February 26, 2016
The recent resignation and retirement of Sumner Redstone at CBS and Viacom in a two-day period brought to light shareholder concerns around board age and tenure. As a growing number of directors nears mandatory retirement age, investors are rightly concerned about the stability of the companies in which they hold stake. And as the baby boomer generation continues to age, this issue will perpetuate.
In a recent interview with C-Suite magazine, Catherine Allen—CEO and Chairman of The Santa Fe Group, member of multiple public boards, and co-author of The Retirement Boom—highlighted the challenges that corporate America faces as the Boomer generation begins to age out of the boardroom naturally.
“I am a big believer in board and personal assessments and in having a certain age limit, although I would argue if you have an age limit you should have exceptions for skillsets,” Allen said. “You have some 75-year-olds who are savvy and can stay up on anything, but in general boards need to stay fresh or be refreshed with new members.”
There is no definable age at which any particular board member should retire, but it’s a simple fact that there are significant numbers of boards primed for turnover in the next few years as their ranks continue to age. Equilar dug into the data on the number of companies who had board members over the age of 70, and found some striking figures.
500: U.S. public companies that have boards with more than four directors over the age of 70—that accounts for approximately 10% of the companies in Equilar’s BoardEdge database.
82: Boards with more than six directors over 70—with average board size checking in at nearly 11 members, we can reasonably expect more than half the directors on these boards to retire in the coming years.
21%: Percentage of Fortune 500 boards that have more than three directors over the age of 70.
The data in this report is powered by Equilar’s BoardEdge, which not only includes information on 140,000 directors and executives qualified for board service, but also more than a dozen categories about each board member’s background and leadership experience. BoardEdge’s defining feature is a networking tool that clearly displays how board members are connected to each other.
For more information on BoardEdge, or to request a demo, click here.
For more information on Equilar’s research and data analysis, please contact Dan Marcec, Director of Content & Marketing Communications at firstname.lastname@example.org.