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Going Overboard? Restrictions May Shrink Qualified Director Pool

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November 20, 2015

With shareholder engagement and outreach coming to the forefront in the wake of Dodd-Frank, directors’ responsibilities are continually expanding into significant professional obligations. As a result, many shareholders and other governance stakeholders are scrutinizing more closely whether board members in multiple roles can devote appropriate attention to their fiduciary duties.

According to Equilar’s BoardEdge database, there are 2,490 directors that currently serve on three or more boards at public companies. Of those, there are 47 directors of public companies on six or more public boards and 140 on five. Meanwhile, there are well over 2,000 directors who are now “at-risk” of being overboarded—516 directors serving on four boards and 1,787 currently serving on three public boards.

Furthermore, a recent study Equilar conducted for Agenda Magazine found that 21 directors currently serve on four or more Fortune 500 boards alone, and another 113 serve on three.

As these top candidates disappear from the talent pool, companies will face the challenge of looking beyond their immediate network and the circle of currently multi-boarded directors when it comes to succession planning.

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The data in this report is powered by Equilar’s BoardEdge, which not only includes information on 135,000 directors and executives qualified for board service, but also more than a dozen categories about each board member’s background and leadership experience, but also features a network tool clearly displaying 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 dmarcec@equilar.com.